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Gokaldas Exports Ltd. Annual Report 2015-2016


ANNEXURE TO DIRECTORS’ REPORT

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9

Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014 in respect of employees of the Company is as follows:

1) Ratio of remuneration of each director to the median remuneration of the employees of the Company forthe financial year

ANNEXURE TO THE DIRECTORS’ REPORT

Sl.No Name Designation

RemunerationPaid FY 2015-16

(Rs lacs)

RemunerationPaid FY 2014-15

(Rs lacs)

Increase inremunerationover previousyear(Rs lacs)

Ratio/times perMedian ofemployee

remuneration

1 P. Ramababu * VC & MD 102.26 0 NA 48.93

2 Mr. Gautam CEO & WTD 14.08 110 Nil 6.74Chakravarti**

Includes fixed, does not include ESOP/Bonus and Perquisite value*Appointed wef May 25, 2015** resigned wef May 25 2015

2) The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer,Company Secretary, in the financial year:Mr. P. Ramababu – Vice Chairman and Managing Director – NilMr. Sathyamurthy . A, Chief Financial officer – Nil (Appointed w e f 16th November, 2015)Ms. Ramya K, Company Secretary – 8.00%

3) The percentage increase in the median remuneration of employees in the financial year : 8%4) The number of permanent employees on the rolls of Company as of 31 March 2016: 223375) The explanation on the relationship between average increase in remuneration and Company performance:

in line with Industry Practice6) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company.

During the year the Company has not done any fixed remuneration revision for the VC & MD and CFO.7) Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the

Current financial year and previous financial year:

Particulars March 31, 2016 March 31, 2015 % Change

Market Capitalization 215 143 50.335(Rs. Crores)P/E Ratio 3.60 4.20 -14.28

8) Average percentile increase already made in the salaries of employees other than the managerial personnel in thelast financial year and its comparison with the percentile increase in the managerial remuneration and justificationthereof and point out if there are any exceptional circumstances for increase in the managerial remuneration :increase in non-managerial salaries were higher than the increase in managerial remuneration during 2015-16

9) Comparison of remuneration of each of the Key Managerial personnel against the performance of theCompany (as % of revenue)

Mr. P . Ramababu, VC & MD 0.090% Mr. Sathyamurthy A, CFO 0.040% Ms. Ramya K, CS 0.007%

10)Key parameters for any variable component of remuneration availed by the directors – revenue and operationalprofitability.

11)The ratio of the remuneration of the highest paid director to that of the employees who are not directors butreceived remuneration in excess of the highest paid director during the year – None

12)Affirmation that the remuneration is as per the remuneration policy of the Company - The Company affirmsthat the remuneration is as per the remuneration policy of the Company.

b) information as per Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) CompaniesAppointment and remuneration of Managerial Personnel) Rules, 2014 forming part of the Directors’Report for the year ended March 31, 2016.

Sl.No Name Age(yrs) Designation

Date ofCommence-

ment ofEmployment

Remunera-tion

Received(Rs. InLakhs)

ProfessionalQualifica-

tion

TotalExperience

(Yrs)

LastEmployment

andDesignation

Whether heis a relativeof Director/

Manager

% of equityshares heldwithin Rule5(2) & 5(3)

1 Mr. P. 68 VC & MD 25th May, 102.26 PG in 44years Consultant No NilRamababu 2015 Social Work

2 Mr. Sumit 46 CFO 20th October, 87.35 CA, CWA 23 years Deutsche No 0.03Keshan* 2010 Bank

*Employed for a part of the year in receipt of remuneration aggregating Rs. 8.5 lakhs per month


ANNEXURE TO DIRECTORS’ REPORTDETAILS OF STOCK OPTIONS PURSUANT TO SEBI (SHARE BASED EMPLOYEE BENEFITS) REGULATION, 2014

Description ESOP Scheme- 2010

No. of Options available under ESOP Scheme-2010 17,18,800

A) No. of Options Granted during FY 2015-16 85,000

B) The Pricing Formula The exercise price for the purposes of the grant ofoptions as decided by the ESOP CompensationCommittee is Rs.32.25, 60.95 and 80.20, the pricebeing not less than the Par value of the equity shareof the Company and not more than the market priceas on 20th May, 2013, 1st Feb, 2014 and 13th Aug,2014 respectively being relevant date subject to the SEBI(Employee Stock Option Scheme and EmployeeStock Purchase Scheme) Guidelines, 1999.

C) Options vested during FY 2015-16 3,23,333

D) Options Exercised during FY 2015-16 1,94,994

E) The total number of shares arising as a result of 1,94,994exercise of options

F) Options lapsed FY 2015-16 5,33,335

G) Variation Terms of Options Nil

H) Money Realized by exercise of options Rs.64,79,870

I) Total Number of Options in Force as on 9,41,674March 31,2016

J) Employee-wise details of options granted to Details as under :

i) Senior Managerial Personnel Yesii) Any other employee who receives a grant in

any one year of option amounting to 5% or Nilmore of option granted during the year

iii) Identified employees who were grantedoption , during any one year , equal to orexceeding 1% of the issued capital (excluding Niloutstanding warrants and conversions) of theCompany at the time of grant

K) Diluted Earnings Per share (EPS) pursuant to issueof shares on exercise of option calculated in Rs. 17.18accordance with Accounting Standard (AS) 20“Earnings Per Share”

L) i) the Method of calculation of Employee Fair Value Method Black-Scholes-MertonCompensation Cost

ii) Difference between the employee compensation Nilcost so computed at (i) above and the employeeCompensation Cost that shall have beenrecognized if it had used the fair value of options

iii) The impact of the difference on profits and on NilEPS of the Company

M) Weighted average exercise prices and weightedaverage fair values of options shall be disclosed Not Applicable – Since no options were grantedseparately for options whose exercise price either during the yearequals or exceeds or is less than the market price

N) A description of the method and significantassumptions used during the year to estimate thefair values of options, including the followingweighted average information : Not Applicable – Since no options were granted1) Risk-free interest rate during the year2) Expected life3) Expected volatility4) Expected dividends5) Price of underlying share in market at the time

of option grant

11

To,

The Members

Gokaldas Exports Limited,

No. 16/2, Residency Road,

Bengaluru - 560 025.

My report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the company. My responsibility

is to express an opinion on these secretarial records based on my audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about

the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that

correct facts are reflected in secretarial records. I believe that the processes and practices, I followed provide a

reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the

company.

4. Wherever required, I have obtained the Management representation about the compliance of laws, rules and

regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is

responsibility of management. My examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the further viability of the company nor of the efficacy

or effectiveness with which the management has conducted the affairs of the company.

Nagendra D. Rao

Practising Company Secretary

Membership No. FCS – 5553

Certificate of Practice – 7731

543/A, 7th Main,

3rd Cross, S.L. Byrappa Road,

Hanumanthnagar,

Bengaluru – 560 019.

Place: Bengaluru

Date: May 30, 2016

ANNEXURE TO DIRECTORS’ REPORT


Form No. MR-3SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,The MembersGokaldas Exports Limited,No. 16/2, Residency Road,Bengaluru - 560 025.

I have conducted the secretarial audit of the compliance of the applicable statutory provisions and the adherenceto good corporate practices by Gokaldas Exports Limited (hereinafter called the company). Secretarial Audit wasconducted in the manner that provided me a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing my opinion thereon.

Based on my verification of the Gokaldas Exports Limited books, papers, minute books, forms and returns filed andother records maintained by the company and also the information provided by the company, its officers, agentsand authorized representatives during the conduct of the secretarial audit, I hereby report that in my opinion, thecompany has, during the audit period covering the financial year ended on 31st March 2016 complied with thestatutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by GokaldasExports Limited (“the Company”) for the financial year ended on 31st March 2016 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) act, 1956 (‘SCRA’) and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent ofForeign Direct Investment, Overseas Direct Investment and External Commercial Borrowings [provisions ofOverseas Direct Investment and External Commercial Borrowings are not applicable];

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of IndiaAct,1992 (‘SEBI Act’):-(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,

2011;(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 (up to 14th

May 2015) and Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations,2015 (effective 15th May 2015);

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,2009 [Not applicable as the Company has not issued any shares during the year under review];

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee StockPurchase Scheme) Guidelines, 1999 / Securities and Exchange Board of India (Share Based EmployeeBenefits) Regulations, 2014 (effective 28th October 2014);

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 [NotApplicable as the Company has not issued any debt securities during the financial year under review];

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations,1993 regarding the Companies Act and dealing with clients [Not Applicable as the Company is notregistered as Registrar to Issue and Share Transfer Agent during the financial year under review];

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 [Not Applicableas the Company has not delisted / propose to delist its equity shares from any stock exchange during thefinancial year under review]; and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 [Not Applicable asthe Company has not bought back / propose to buyback any of its securities during the financial yearunder review

(vi) We have relied on the representation made by the company and its officers for systems and mechanismformed by the company for compliances under other applicable Acts, Laws and Regulations to the Company.

The Laws as are applicable specifically to the Company are as under:The Central Excise Act, 1944,The Customs Act, 1962,The Karnataka Value Added Tax,The Central Sales Tax Act, 1956The Payment of Bonus Act, 1965,The Environment Protection Act, 1986,

13

The Maternity Benefit Act, 1961The Factories Act, 1948,The Minimum Wages Act, 1948,The Payment of Wages Act, 1936,The Employees Provident Funds and Miscellaneous Provisions Act, 1952,The Employees State Insurance Act, 1948The Payment of Gratuity Act, 1972,The Industrial Disputes Act, 1947,The Employees Compensation Act, 1923,The Equal Remuneration Act, 1976 andKarnataka Shops and Establishment Act, 1961

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards with respect to Meetings of Board of Directors (SS-1) and General Meetings (SS-2)issued by The Institute of Company Secretaries of India and made effective 1st July, 2015.

(ii) The Listing Agreements entered into by the Company with BSE Limited and National Stock Exchange ofIndia Limited (up to 30th November 2015) and The Listing Agreements entered into by the Company withBSE Limited and National Stock Exchange of India Limited under SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015 (effective 1st December, 2015).

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations,Guidelines, Standards, etc. mentioned above subject to the following:

1. Form MR -1 [Return of appointment of key managerial personnel] in relation to the appointmentof Mr. P. Ramababu, Managing Director has been filed belatedly.

I further report that

The Board of Directors of the company is duly constituted with proper balance of Executive Directors, Non-ExecutiveDirectors and Independent Directors. The changes in the composition of the Board of Directors that took placeduring the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda weresent at least seven days in advance, and a system exists for seeking and obtaining further information and clarificationson the agenda items before the meeting and for meaningful participation at the meeting.

As per the Minutes of the Board of Directors duly recorded and signed by the Chairman, the decisions wereunanimous and no dissenting views were required to be recorded.

I further report that based on review of compliance mechanism established by the Company and on the basis of theCompliance Certificate(s) issued by the Managing Director and taken on record by the Board of Directors at theirmeeting(s), I am of the opinion that the management of the Company has adequate systems and processes in thecompany commensurate with the size and operations of the company to monitor and ensure compliance withapplicable laws, rules, regulations and guidelines.

I further report that during the audit period, the company has passed following Special resolutions which arehaving major bearing on the Company’s Affairs in pursuance of the above referred Laws, Rules, Regulations,Guidelines, Standards, etc.:1. Appointment of Mr. P. Ramababu, as Vice Chairman and Managing Director.2. Transfer of Building Plant & Machinery and related assets pertaining to the Company’s property at 76/77, 6th

Main, 3rd Phase, Peenya Industrial Area, Bangalore, to its wholly owned subsidiary, Robot Systems Pvt Ltd.3. Transfer of Shares of the Company’s subsidiary, Robot Systems Private Limited.4. Transfer of Land and Building pertaining to the Company’s Property at Nacharam, Hyderabad To Its Wholly

Owned Subsidiary, All Colour Garments Pvt Ltd.5. Transfer / Sale of Land, Building and related assets pertaining to the Company’s Property at No. 40/1-1 (Old

No.17/D) Industrial Suburb, Ward No. 10 1st and 2nd Stage, Mahalakhsmipura, Yeshwanthpura, Bangalore.6. Transfer / Sale of Land, Building, and related assets pertaining to the Company’s Property at Nacharam, Hyderabad.7. Transfer / Sale of Land, Building and related assets pertaining to the Company’s Property at Plot No.28D & 28E

In SY No. 318 & 51 in Belavadi Industrial Area, Belavadi Village, Kasaba Hobli, Mysore Taluk, Mysore District and8. Transfer / Sale of Land, Building and related assets pertaining to the Company’s Property at No.61, 1st Main,

Industrial Suburb, IInd Stage, Yeshwanthpur, Bangalore.

Nagendra D. RaoPractising Company Secretary

Membership No. FCS – 5553Certificate of Practice – 7731

543/A, 7th Main,3rd Cross, S.L.Byrappa Road,

Place: Bengaluru Hanumanthnagar,Date: May 30, 2016 Bengaluru – 560 019.


FORM NO. MGT 9EXTRACT OF ANNUAL RETURN

As on financial year ended on 31.03.2016Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company

(Management & Administration) Rules, 2014.

I. REGISTRATION & OTHER DETAILS:

1. CIN L18101KA2004PLC033475

2. Registration Date 01/03/2004

3. Name of the Company GOKALDAS EXPORTS LTD

4. Category/Sub-category of the Company PUBLIC, LISTED

5. Address of the Registered office NO, 16/2, RESIDENCY ROAD,& contact details BENGALURU - 560025

6. Whether listed company YES

7. Name, Address & contact details MS. SHOBHA ANAND, KARVY COMPUTERSHARE PVT. LTD.of the Registrar & Transfer Agent, if any. KARVY SELENIUM TOWER, B, PLOT 31-32, GACHIBOWLI,

FINANCIAL DISTRICT, NANAKRAMGUDA,HYDERABAD - 500032.

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10 % or more of the total turnover of the company shall be stated)

Sl.No. Name and Description of main products / NIC Code of the Product/service % to total turnover ofservices the company

1 Apparel and Clothing 6105 100%

III PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES-

1. All Colour Garments Pvt Ltd U17111KA2004PTC034055 Subsidiary 100% 2(87)No. 16/2, Residency Road,Bengaluru - 560025

2. Deejay Trading Pvt Ltd U17111KA2003PTC031614 Subsidiary 100% 2(87)No. 16/2, Residency Road,Bengaluru - 560025

3. Glamourwear Apparels Pvt Ltd U18101KA2004PTC034154 Subsidiary 100% 2(87)No. 16/2, Residency Road,Bengaluru - 560025

4. Madhin Trading Pvt Ltd U17111KA2003PTC031643 Subsidiary 100% 2(87)No. 16/2, Residency Road,Bengaluru - 560025

5. Magenta Trading Pvt Ltd U17111KA2003PTC031645 Subsidiary 100% 2(87)No. 16/2, Residency Road,Bengaluru - 560025

6. Rafter Trading Pvt Ltd U17111KA2003PTC031681 Subsidiary 100% 2(87)No. 16/2, Residency Road,Bengaluru - 560025

7. Rajdin Apparels Pvt Ltd U18101KA2004PTC033904 Subsidiary 100% 2(87)No. 16/2, Residency Road,Bengaluru - 560025

8. Reflexion Trading Pvt Ltd U17111KA2003PTC031680 Subsidiary 100% 2(87)No. 16/2, Residency Road,Bengaluru - 560025

9. Rishikesh Apparels Pvt Ltd U18101KA2004PTC033760 Subsidiary 100% 2(87)No. 16/2, Residency Road,Bengaluru - 560025

10. Seven Hills Clothing Pvt Ltd U18101KA2004PTC034162 Subsidiary 100% 2(87)No. 16/2, Residency Road,Bengaluru - 560025

Sl.No.

Name and Address of thecompany

CIN / GINHolding/

Subsidiary/Associate

% of sharesHeld

Applicablesection

15

Sl.No.

Name and Address of thecompany

CIN / GINHolding/

Subsidiary/Associate

% of sharesHeld

11. SNS Clothing Pvt Ltd U17115KA2004PTC034457 Subsidiary 100% 2(87)No. 16/2, Residency Road,Bengaluru - 560025

12. Vignesh Apparels Pvt Ltd U18101KA2004PTC033759 Subsidiary 100% 2(87)No. 16/2, Residency Road,Bengaluru - 560025

VI. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)Category-wise Share Holding

Category ofShareholders

No. of Shares held at the beginning ofthe year[As on 31-March-2015]

No. of Shares held at the end of theyear[As on 31-March-2016]

% Changeduring

the yearDemat Physical Total % of

TotalShares

Demat Physical Total % ofTotal

Shares(A) PROMOTER ANDPROMOTER GROUP(1) INDIAN(a) Individual /HUF 0 0 0 0.00 0 0 0 0.00 0.00(b) Central 0 0 0 0.00 0 0 0 0.00 0.00Government/StateGovernment(s)(c) Bodies Corporate 0 0 0 0.00 0 0 0 0.00 0.00(d) Financial 0 0 0 0.00 0 0 0 0.00 0.00Institutions / Banks(e) Others 0 0 0 0.00 0 0 0 0.00 0.00 Sub-Total A(1) : 0 0 0 0.00 0 0 0 0.00 0.00(2) FOREIGN(a) Individuals 0 0 0 0.00 0 0 0 0.00 0.00(NRIs/ForeignIndividuals)(b) Bodies Corporate 19983742 0 19983742 57.77 19983742 0 19983742 57.44 0.32(c) Institutions 0 0 0 0.00 0 0 0 0.00 0.00(d) Qualified 0 0 0 0.00 0 0 0 0.00 0.00Foreign Investor(e) Others 0 0 0 0.00 0 0 0 0.00 0.00Sub-Total A(2) : 19983742 0 19983742 57.77 19983742 0 19983742 57.44 0.32 Total A=A(1)+A(2) 19983742 0 19983742 57.77 19983742 0 19983742 57.44 0.32(B) PUBLICSHAREHOLDING(1) INSTITUTIONS(a) Mutual Funds /UTI 0 0 0 0.00 0 0 0 0.00 0.00(b) Financial 3784984 0 3784984 10.94 408501 0 408501 1.17 9.77Institutions /Banks(c) Central 0 0 0 0.00 0 0 0 0.00 0.00Government / StateGovernment(s)(d) Venture Capital 0 0 0 0.00 0 0 0 0.00 0.00Funds(e) Insurance 0 0 0 0.00 0 0 0 0.00 0.00Companies(f) Foreign 0 0 0 0.00 5169 0 5169 0.01 -0.01Institutional Investors(g) Foreign Venture 0 0 0 0.00 0 0 0 0.00 0.00Capital Investors(h) Qualified 0 0 0 0.00 0 0 0 0.00 0.00Foreign Investor(i) Others 0 0 0 0.00 0 0 0 0.00 0.00Sub-Total B(1) : 3784984 0 3784984 10.94 413670 0 413670 1.19 9.75

Applicablesection


(2) NON-INSTITUTIONS

(a) Bodies Corporate 3510722 0 3510722 10.15 4397905 0 4397905 12.64 -2.49

(b) Individuals

(i) Individuals 2865012 619 2865631 8.28 6355653 3952 6359605 18.28 -10.00holding nominalshare capital uptoRs.1 lakh

(ii) Individuals 4359397 0 4359397 12.60 3027945 0 3027945 8.70 3.90holding nominalshare capital inexcess of Rs.1 lakh

(c) Others

CLEARING MEMBERS 47530 0 47530 0.14 73498 0 73498 0.21 -0.07

NON RESIDENT INDIANS 42326 0 42326 0.12 532961 0 532961 1.53 -1.41

(d) Qualified 0 0 0 0.00 0 0 0 0.00 0.00Foreign Investor

Sub-Total B(2) : 10824987 619 10825606 31.29 14387962 3952 14391914 41.37 -10.08

Total B=B(1)+B(2) : 14609971 619 14610590 42.23 14801632 3952 14805584 42.56 -0.32

Total (A+B) : 34593713 619 34594332 100.00 34785374 3952 34789326 100.00 0.00

(C) Shares held by 0 0 0 0.00 0 0 0 0.00 0.00custodians, againstwhich DepositoryReceipts have beenissued

(1) Promoter and 0 0 0 0.00 0 0 0 0.00 0.00Promoter Group

(2) Public 0 0 0 0.00 0 0 0 0.00 0.00

GRAND TOTAL 34593713 619 34594332 100.00 34785374 3952 34789326 100.00 0.00(A+B+C) :

B) Shareholding of Promoter-

Sl.No.

Shareholder’sName

Shareholding at the beginningof the year

Shareholding at the end of the year %changein shareholdingduringtheyear

No. of Shares % of totalShares ofthecompany

% ofSharesPledged /encum-bered tototalshares

No. of Shares % of totalShares ofthecompany

% ofSharesPledged /encum-bered tototalshares

BLACKSTONE FPCAPITALPARTNERS(MAURITIUS) V-B

19983742 57.77 100 19983742 57.44 100 0.33

1

Category ofShareholders

No. of Shares held at the beginning ofthe year[As on 31-March-2015]

No. of Shares held at the end of theyear[As on 31-March-2016]

% Changeduring

the yearDemat Physical Total % of

TotalShares

Demat Physical Total % ofTotal

Shares

17

1. The Shares of the Company are substantially held in dematerialised form, and are traded on a daily basis and hence thedate wise increase/decrease in shareholding is not indicated.

2. Common Top 10 shareholders as on April 1, 2015 and March 31, 2016

*Top 10 Shareholders as on April 1 2015

#Top 10 shareholders as on March 31 2016

D) Shareholding Pattern of top ten Shareholders:(Other than Directors, Promoters and Holders of GDRs and ADRs):

Sl.No.

For Each of the Top 10Shareholders


Shareholding at the end of the year

No. of Shares % of totalShares of thecompany

No. of Shares % of totalShares of thecompany

1. Blackstone FP Capital Partners 19983742 57.77 19983742 57.44(Mauritius) V-B

2. ICICI Bank Ltd* 3485500 10.08 0 0

3. Shinano Retail Pvt Ltd* 1413513 4.09 1413513 4.06

4. Madanlal Jhamandas Hinduja* 1227934 3.55 0 0

5. Rajendra J Hinduja* 1121486 3.24 0 06. Dinesh Jhamandas Hinduja* 897346 2.59 0 0

7. Ojasvi Trading Pvt Ltd* 867000 2.51 867000 2.49

8. Life Insurance Corporation of India* 299484 0.87 299484 0.86

9. Param Capital Research Pvt Ltd* 200652 0.58 0 010. Zaki Abbas Nasser* 200000 0.58 370000 1.06

11. Chetan Jayantilal Shah# 0 0 341000 0.98

12. Bhadra Jayantilal Shah# 0 0 325000 0.93

13. Jayantilal Premji Shah# 0 0 304000 0.8714. Sudhir Shivji Bheda# 0 0 107346 0.31

15. Angel Fincap Pvt Ltd# 0 0 93795 0.27

C) Change in Promoters’ Shareholding (please specify, if there is no change)

Sl.No.

Particulars Shareholding at the beginningof the year

Shareholding at the end of the year

No. of Shares % of totalShares of the

company


company

1 BLACKSTONE FP CAPITAL 19983742 57.77 19983742 57.44PARTNERS(MAURITIUS) V-B


Name of the Key ManagerialPersonnel


Cumulative Shareholding duringthe year


company


company

1 At the beginning of the year 0 0 0 0

Mr. P. Ramababu – VC & MD 0 0 0 0

Mr. Sathyamurthy A - CFO 0 0 0 0

Ms. Ramya K - CS 0 0 0 0

2 At the end of the year 0 0 0 0

Mr. P. Ramababu – VC & MD 0 0 0 0

Mr. Sathyamurthy A - CFO 0 0 0 0

Ms. Ramya K - CS 0 0 0 0

E) Shareholding of Directors and Key Managerial Personnel:

Name of the Directors


Cumulative Shareholding duringthe year


company


company

1 Mr. P. Ramababu, Vice Chairman& Managing DirectorAt the beginning of the year 0 0 0 0

At the end of the year 0 0 0 0

2 Arun K Thiagarajan, IndependentDirectorAt the beginning of the year 0 0 0 0

August 12th, 2015 Allotment 3333 0.01 0 0


3 Jitendra H Mehta, IndependentDirectorAt the beginning of the year 0 0 0 0

November 9th, 2015 Allotment 3333 0.01 0 0


SN

SN

19

V) INDEBTEDNESS -Indebtedness of the Company including interest outstanding/accrued but not due for payment.In Crores

Secured Loansexcludingdeposits

UnsecuredLoans

Deposits TotalIndebtedness

Indebtedness at the beginning of thefinancial yeari) Principal Amount 310.86 0 0 310.86

ii) Interest due but not paid 0 0 0 0

iii) Interest accrued butnot due 2.15 0 0 2.15

Total (i+ii+iii) 313.01 0 0 313.01Change in Indebtednessduring the financial year

* Addition 32.15 0 0 32.15

* Reduction 0 0 0 0

Net Change 32.15 0 0 32.15Indebtedness at theend of the financial year

i) Principal Amount 343.46 0 0 343.46

ii) Interest due but not paid 0 0 0 0

iii) Interest accruedbut not due 1.70 0 0 1.70Total (i+ii+iii) 345.16 0 0 345.16

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL-A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

SN. Particulars of Remuneration TotalAmount

1 Gross salary

(a) Salary as per provisions contained in section 1,02,25,807 14,07,965 1,16,33,77217(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income-tax Act,1961 10,42,833 0 10,42,833

(c) Profits in lieu of salary under section 17(3)Income- tax Act, 1961 0 0 0

2 Stock Option 0 0 0

3 Sweat Equity 0 0 0

4 Commission

- as % of profit 0 0 0

- others, specify… 0 0 0

5 Others, please specify Incentive 0 0 0

Total (A) 1,12,68,640 14,07,965 1,26,76,605

Ceiling as per the Act 0 0 0

P Ramababu, VC& MD, from 25th

May, 2015

GautamChakravarti, WTD& CEO uptill 25th

May, 2015


B. Remuneration to other directors

SN. Particulars of Remuneration Name of Directors TotalAmount

Arun KThiagarajan,

Indepen-dent

Director

J H Mehta,Indepen-

dentDirector

Dr. Y S PThorat,

Indepen-dent

Director

SmitaAggarwal,Indepen-

dentDirector

Richard BSaldanha,

Chairman &N E D

1 Independent Directors

Fee for attending boardcommittee meetings 7,20,000 11,20,000 8,00,000 4,80,000 0 0 31,20,000

Commission 0 0 0 0 0 0 0Others, please specify 0 0 0 0 0 0 0

Total (1) 7,20,000 11,20,000 8,00,000 4,80,000 0 0 31,20,000

2 Other Non-Executive Directors

Fee for attending boardcommittee meetings 0 0 0 800,000 0 800,000Commission 0 0 0 0 0 0 0

Others, please specify 0 0 0 0 0 0 0

Total (2) 0 0 0 0 800,000 0 800,000

Total (B)=(1+2) 7,20,000 11,20,000 8,00,000 4,80,000 8,00,000 0 39,20,000Total ManagerialRemuneration 0 0 0 0 0 0 0

Overall Ceiling as per 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000the Act per per per per per per per

meeting meeting meeting meeting meeting meeting meeting

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

SN Particulars of Remuneration Key Managerial Personnel

Sumit Keshan,CFO up till

15thNovember,

2015

Sathyamurthy A,CFO from 16th

November, 2015

1 Gross salary

(a) Salary and allowances 62,55,166 22,49,000 8,20,833 93,24,999(b) Value of perquisites u/s 17(2)Income-tax Act, 1961 0 0 0 0

(c)Bonus paid in fiscal 2016 0 0 0 0

(d) Profits in lieu of salary undersection 17(3) Income-tax Act, 1961 0 0 0 0

2 Stock Option 9,79,600 0 0 9,79,6003 Sweat Equity 0 0 0 0

4 Commission 0 0 0 0

- as % of profit 0 0 0 0

others, specify… 0 0 0 05 Incentive** 15,00,000 0 0 15,00,000

Total 87,34,766 22,49,000 8,20,833 1,18,04,599

**Incentive as above pertains to year 2014-15 but paid out in 2015-16

Ramya k, CS

MathewCyriac, Non-

ExecutiveDirector

Total

21

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of theCompanies Act Brief Description

Details ofPenalty /

Punishment/Compoundingfees imposed

Authority[RD / NCLT/

COURT]

Appeal made,if any (give

Details)

A. COMPANYPenaltyPunishment

Compounding

B. DIRECTORSPenaltyPunishment

Compounding

C. OTHER OFFICERS IN DEFAULTPenaltyPunishment

Compounding

Not A

pplic

able


Sl.no Date of the Board Meeting Board Strength No of Directors Present

1 May 25th 2015 7 7

2 August 12th 2015 7 7

3 September 18th 2015 7 3

4 November 9th 2015 7 5

5 January 5th 2016 6 4

6 February 12th 2016 6 5

The last Annual General Meeting (AGM) was held on Friday, September 18th, 2015, 3.00 PM

Particulars of the directorship of the Board, membership and office of the Chairman of Board Committees across allCompanies as on the date of this Report and attendance at the Board Meetings of the Company are given below:

MeetingsThe meetings of the Board of Directors are normally held at the Company’s Registered Office in Bengaluru. Duringthe year under review, 6 (Six) meetings were held on May 25th 2015, August 12th 2015, September 18th 2015,November 9th 2015, January 5th, 2016 and February 12th 2016.

The Company Secretary prepares the agenda and explanatory notes, in consultation with the Chairman and ViceChairman & Managing Director and circulates the same well in advance to the Directors. Every Director is free tosuggest inclusion of items on the agenda. The Board is provided with the relevant information as stipulated inClause 49 of the Listing Agreement and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015. The Meetings are governed by a structured agenda.

The details of the Board meetings for the financial year 2015-2016 are as under:

CORPORATE GOVERNANCE REPORTCompany’s philosophy on Corporate Governance

Corporate governance is an ethically driven business process that is committed to values. This is ensured by takingethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders’expectations. It is imperative that our company’s affairs are managed in a fair and transparent manner. This is vitalto gain and retain the trust of our stakeholders. We conduct our business in a manner that is fair to all ourstakeholders, we practice highest standards of integrity in all our actions and we respect and comply with the lawsof the geographies in which we are present.

Good Corporate Governance leads to long-term shareholder value creation. It brings into focus the fiduciary and trusteerole of the Board to align and direct the actions of the organization towards creating wealth and shareholder value.

Recently, the Securities and Exchange Board of India (SEBI) sought to amend the equity listing agreement to bringin additional corporate governance norms for listed entities. These norms provide for stricter disclosures andprotection of investor rights, including equitable treatment for minority and foreign shareholders. The amendednorms are aligned with the provisions of the companies Act, 2013, and are aimed to encourage companies toadopt best practices on corporate governance.

Your Company is in compliance with the requirements of the guidelines on Corporate Governance stipulated underClause 49 of the Listing Agreement / Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015 and presents the following Corporate Governance Report for the year 2015-16, based on thesaid disclosure requirements.

Board of Directors

The Board is headed by a Non-Executive Chairman, Mr. Richard B. Saldanha, and is composed of eminent persons withconsiderable professional experience in diverse fields viz, manufacturing, marketing, finance, banking, legal, managementand commercial administration and comprises of a majority of Non-Executive Directors and Independent Directors. TheGokaldas Exports Board is a balanced Board, comprising of Executive and Non-Executive Directors. As on March 31,2016, the Board consists of 6 members, 5 of whom are Non- executive, out of which 3 are Independent Directors.

The composition of the Board and category of Directors as on this date of Report:

Sl. No. Name of Directors Category

1. Mr. Richard B. Saldanha Non Executive Director & Chairman2. Mr. P. Ramababu Executive Director-Vice Chairman and Managing Director3. Mr. Arun K.Thiagarajan Non Executive & Independent Director4. Mr. Mathew Cyriac Non Executive Director5. Mr. Jitendrakumar H.Mehta Non Executive & Independent Director6. Ms. Smita Aggarwal Non Executive & Independent Director

23

Remuneration to Executive Directors Rs in Lakhs

CORPORATE GOVERNANCE REPORT

AttendanceParticulars

No of Directorship and CommitteeMembership/Chairmanships

as on report date

Commit-tee

Chairmanhips6

CommitteeMembershipsDirectors

hips

AttendedHeld

CategoryNameSlNo

1 Mr. Richard Chairman & 6 6 Yes 9 7 1B. Saldanha Non- Executive Director

2 Mr. Ramababu* VC & MD, Executive 5 5 Yes 12 1 -Director

3 Mr. Gautam G. WTD&CEO, Executive 1 1 NA - - -Chakravarti** Director

4 Mr. Arun K. Non-Executive and 6 3 Yes 8 3 2Thiagarajan Independent Director

5 Mr. Mathew Cyriac Non-Executive Director 6 5 No 11 1 -

6 Mr. Jitendrakumar Non-Executive and 6 5 No 2 2 -H.Mehta Independent Director

7 Dr. Yashwant S.Thorat@ Non-Executive and 3 3 No - - -Independent Director

8 Ms. Smita Non-Executive and 6 3 No 2 1 -Aggarwal Independent Director

Name of the Director Designation Total

Mr. P. Ramababu Vice Chairman & Managing Director Rs. 112.68

The terms and conditions of the executive director’s appointment and remuneration are governed by the resolutionpassed by the shareholders of his appointment; The Company has not entered into separate agreement for thecontract of services with the executive director.

Independent Directors are entitled to sitting fee only and are not entitled to any remuneration. The Board of Directors haveproposed to pay commission of 1% of the net profits of the Company for a period not exceeding 5 (five) financial years,commencing from financial year ending 31st March, 2016, subject to the approval of the members of the Company.

Directors Details :

1. * Appointed as Vice Chairman and Managing Director with effect from 25th May 20152. ** Resigned from Board as director w.e.f 25th May 20153. @ Dr. Y S P Thorat has resigned from the Board as an Independent Director with effect from 1st December 20154. Excludes Private limited Companies, Foreign Companies and Companies registered under Section 25 of the Companies Act, 1956/Section 8 of

Companies Act 20135. Excludes alternate Directorships but includes Additional Directorships and Directorship in Gokaldas Exports Limited6. Committees considered are Audit Committee and Stakeholders Relationship Committee, as per Clause 49 of the Listing Agreement and Regulation

26 of SEBI (Listing obligations and Disclosure Requirements) Regulations 2015. Committee membership includes Committee Chairmanship

Whetherattendedlast AGM

No. of BoardMeetings

Code of Conduct

In compliance with the Clause 49 (1) (d) of the Listing Agreement / Regulation 17 (5) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations, 2015, the Company has adopted a Code of conduct and Ethics for theBoard of Directors, officers and employees of the Company. The said Code of Conduct and Ethics is posted on thewebsite of the Company: http://www.gokaldasexports.com. The code is circulated to all the members of the Board,Officers and Employees of the Company on an annual basis and compliance of the same is affirmed by them on orbefore 31st March of every year.

DECLARATION ON CODE OF CONDUCT

To,

The MembersGokaldas Exports Limited,No. 16/2, Residency Road,Bengaluru- 560 025

This is to confirm that the Company has adopted “Gokaldas Exports Group Code of Conduct and Ethics” herein afterreferred as “Code of Conduct” for its employees including the officers and Board Members. In addition, the Companyhas adopted the Code of Conduct and Ethics for its Subsidiaries and Associate Companies.

The Code of Conduct is posted on the Company’s website, http://www.gokaldasexports.com.


CORPORATE GOVERNANCE REPORTI hereby confirm that all the directors, officers and employees of the company have affirmed compliance to theirrespective Codes of Conduct and Ethics, as applicable to them for the financial year ended March 31, 2016.

Place : Bengaluru

Date : August 9, 2016Richard B Saldanha

Chairman

Committees of the Board

In compliance with the Companies Act, 2013, Listing Agreements and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015, the Board has constituted a set of committees with specific terms of referenceand scope to deal with specified matters expediently. Presently, the Board has four committees:1. Audit Committee2. Stakeholders’ Relationship Committee3. Nomination & Remuneration Committee &4. Corporate Social Responsibility Committee

1. Audit Committee

1.1 The Audit Committee of the Company is constituted in line with the requirements of the clause 49 of ListingAgreement / Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 readwith Section 177(1) of the Companies Act, 2013(“Act”).

Constitution of Audit Committee:

During the year under review, the Audit Committee of the Company consisted of four members and all are IndependentDirectors with vast experience in Financial Management. The members of the Committee during the period underreview were:1. Mr. Arun K. Thiagarajan, Chairman2. Mr. Jitendrakumar H. Mehta, Member3. Mrs. Smita Aggarwal, Member and4. Dr. Y S P Thorat, Member

Meetings and attendance of Audit Committee Members during the financial year:During the financial year ended March 31, 2016, 4 (Four) Meetings of the Audit Committee were held on May 25,2015, August 12, 2015, November 9, 2015 and February 12, 2016. The composition of the Audit Committee and thenumber of meetings attended during the year under review are as under:

Name of the Director No. of Meetings Held No. of Meetings Attended

Mr. Arun K. Thiagarajan 4 2

Mr. Jitendrakumar H. Mehta 4 4

Dr. Yashwant S. Thorat* 4 3

Mrs. Smita Aggarwal 4 3

Terms of Reference of the Audit Committee

• Overview of the Company’s financial reporting process and the disclosure of its financial information to ensurethat the financial statements reflect a true and fair position and that sufficient and credible information aredisclosed.

• Recommending the appointment and removal of external auditors, fixation of audit fee and also approval forpayment for any other services.

• Discussion with the external auditors before the audit commences, of the nature and scope of audit as well aspost-audit discussion to ascertain any area of concern.

• Reviewing the financial statements and draft audit report, including the quarterly/half-yearly financial information

• Reviewing with the management the annual financial statements before submission to the Board, focusingprimarily on:- Any changes in accounting policies and practices;

- Major accounting entries based on exercise of judgment by management;

- Qualifications in draft audit report;

*Dr. Y S P Thorat has resigned from the Board as an Independent Director w.e.f 1st December, 2015

25

- Significant adjustments arising out of audit;

- Going concern assumption;

- Compliance with accounting standards;- Compliance with stock exchange and legal requirements concerning financial statements;

- Any related party transactions as per Accounting Standard 18.

• Reviewing the Company’s financial and risk management policies.

• Disclosure of contingent liabilities.

• Reviewing with the management, external and internal auditors, the adequacy of internal control systems

• Reviewing the adequacy of internal audit function, including the audit charter, the structure of the internalaudit department, approval of the audit plan and its execution, coverage and frequency of internal audit.

• Discussion with internal auditors of any significant findings and follow-ups thereon.

• Reviewing the findings of any internal investigations by the internal auditors into matters where there issuspected fraud or irregularity or a failure or internal control systems of a material nature and reporting thematter to the Board.

• Looking into the reasons for substantial defaults in payments to the depositors, debenture holders, shareholders(in case of non-payment of declared dividends) and creditors.

1.2 The Audit Committee invites such of the executives, as it considers appropriate (particularly the head of thefinance function), representatives of the statutory auditors and representatives of the internal auditors to bepresent at its meetings. The Company Secretary acts as the secretary to the Audit Committee.

2. Stakeholders’ Relationship Committee

The Stakeholders Relationship Committee of the Company is formed as per the Listing Agreement / Regulation 20of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. It consists of 3 members. Mr. Arun.K. Thiagarajan, Non-Executive and Independent Director is the Chairman of the Committee.

During the year under review, one meeting of the Stakeholders’ Relationship Committee was held on February 12,2016 in compliance with the provisions of the Companies Act, 2013.



Mr. Arun K. Thiagarajan, Chairman 1 0

Mr. Richard B Saldanha, Member 1 1

Mr. P. Ramababu, Member 1 1

The Stakeholders’ Relationship Committee is primarily responsible for Redressal of shareholders’/investors’/ Securityholders’ grievances including complaints related to transfer of shares, non-receipt of declared dividends, annualreports etc.

The Board at its meeting held on May 10, 2014 reconstituted this Committee as Stakeholders’ Relationship Committeein Compliance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The Committee is to examine and redress shareholders’ and investors’ complaints. The status of complaints andshare transfers is reported to the Board.

The Company through its Registrar and Share Transfer Agents has resolved the investors’ grievances / correspondenceat the earliest from the date of their receipt.

Monitor implementation of the Company’s code of Conduct for prohibition of Insider Trading.

The statistics of Shareholders complaints received / redressed, during the year under review is appended below:

No. of Shareholders complaints pending as at April 01, 2015 Nil

No. of Complaints relating to Non-receipt of dividend warrants, Redemption / Interest warrants, Annual Reports,Share certificates, endorsement stickers, change of address, deletion of name and others received during the yearApril 01, 2015 to March 31, 2016 7

No. of Shareholders complaints resolved during the year April 01, 2015 to March 31, 2016 7

No. of Shareholders complaints pending as on March 31, 2016 Nil

Secretarial Audit for Reconciliation of Capital

A Secretarial Audit was carried out by Mr. Nagendra D Rao, Practicing Company Secretary for reconciling the total


admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited(CDSL) and the total issued and listed capital. The audit confirms that the total issued/paid up capital is in agreementwith the total number of shares held in physical form and the total number of dematerialized shares held with NSDLand CDSL. This audit is carried out every quarter and the report thereon is submitted to the stock exchanges and isalso placed before the Board of Directors.

3. Nomination & Remuneration Committee

Nomination & Remuneration Committee (“the Committee”) currently comprises of three independent Directors:



Mr. Jitendrakumar H Mehta, Chairman 3 3

Mr. Arun K Thiagarajan, Member 3 2

Dr. Yashwant S Thorat*, Member 3 3

Mrs. Smita Aggarwal**, Member NA NA

The Remuneration Committee met on May 25th , 2015, August 12th , 2015 and November 9th, 2015 during theyear 2015 -16.

The Board at its meeting held on May 10th, 2014 reconstituted this Committee as Nomination and RemunerationCommittee in Compliance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreementand Regulation 19 of the SEBI (Listing obligations and Disclosure Requirements) Regulations 2015.

Terms of Reference:

To identify persons who are qualified to become Directors and who may be appointed in senior management inaccordance with the criteria laid down and to recommend to the Board of their appointment and /or removal.

To carry out evaluation of Directors’ performance.

To formulate the criteria for determining qualifications, positive attributes and independence of a Director, andrecommend to the Board a policy, relating to the remuneration for the Directors, Key Managerial Personnel andother employees.

To formulate the criteria for evaluation of Independent Directors and the Board.

To recommend/review remuneration of the Managing Director(s) and Whole-Time Director(s) based on theirperformance and defined assessment criteria.

To carry out any other function as is mandated by the Board from time to time and/or enforced by any statutorynotification, amendment or modification, as may be applicable.

To perform such other functions as may be necessary or appropriate for the performance of its duties includingcarrying out any other functions within its terms of reference as outlined in Clause 49 of the listing Agreement andsection 178 of the Companies Act, 2013.

4. Corporate Social Responsibility Committee

Currently the Committee consists of three Directors chaired by Mrs. Smita Aggarwal, an Independent Director.

The Corporate Social Responsibility (CSR) committee was constituted by the Board at its meeting held on May 10,2014 considering requirements of the Companies Act, 2013 relating to the formation of a Corporate SocialResponsibility Policy.

The Committee’s prime responsibility is to assist the Board in discharging its social responsibilities by way offormulating and monitoring implementation of the framework of ‘corporate social responsibility policy’.

5. Independent Directors Meet

In accordance with the provisions of the Companies Act, 2013, the Independent Directors of the Company shallhold at least one meeting in a year, without the attendance of non-Independent Directors and members ofmanagement. Directors on the Board to abide by the provisions specified in Schedule IV of the Companies Act,which defines Code for Independent Directors. During the year, separate meeting of the Independent Directors ofthe Company was held on 23rd March, 2016.

*Dr. Y S P Thorat has resigned from the Board as an Independent Director wef 1st December, 2015**Mrs. Smita Aggarwal has been appointed as a member of the Committee wef 5th January, 2016


Mr. Jitendrakumar H Mehta 1 1

Mr. Arun K Thiagarajan 1 1

Ms. Smita Aggarwal 1 1

27


Terms of the Meet

Review the performance of the Non-Independent Directors and Board as a whole and also the Chairperson of theCompany to assess the quality, quantity and timely flow of information between the Company and management.Board needs to provide effective strategic direction to the Company and to direct on key decisions impacting theperformance of the Company. To review the financial performance of the company and suggest corrective actions.

Risk Management:

The Board reviews the Company’s risk management practices and policies periodically. This includes comprehensivereview of various risks attached to the company’s business for achieving key objectives and actions taken tomitigate them. The Board reviews and advises on risk management aspects inter alia in the areas of leadershipdevelopment, information security, project management and execution risks, contracts management risks, financialrisks, forex risks and geopolitical risks.

Subsidiary Companies’ Monitoring Framework:

All the Company’s subsidiaries are wholly owned subsidiaries with their Boards having rights and obligations tomanage such Companies in the best interest of the stakeholders. The Company does not have any material unlistedsubsidiary and hence is not required to nominate an Independent Director of the Company on the Board of anysubsidiary. The Audit Committee reviews the financial statements; in particular investments made by unlistedsubsidiary companies, Minutes of the Board meetings of unlisted subsidiary companies are placed and reviewedperiodically by the Company’s Board. A statement containing all significant transactions and arrangements enteredinto by unlisted subsidiary companies is placed before the Company’s Board.

Disclosures

Disclosures on materially significant related party transactions

The related party transactions during the year ended March 31, 2016 have been listed in the notes to the accounts.Shareholders may please refer the same. However, these are not in conflict with the interests of the company atlarge. There are no material individual transactions which are not in the normal course of business.

Details of non-compliance by the Company, penalties and strictures imposed on the Company by theStock Exchanges, SEBI or any statutory authorities or any member related to capital markets.

There has been no non-compliance of any legal requirements nor have there been any strictures imposed by anystock exchange, SEBI or any other statutory authorities on any matters relating to the capital markets.

Whistle Blower Policy

Pursuant to Section 177(9) of the Companies Act, 2013 and Listing Agreement and SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015, the Board has established a Vigilance Mechanism to report concernsabout unethical behaviour, actual or suspected fraud or violation of our Code of Conduct or ethics policy. It alsoprovides for adequate safeguards against victimization of employees who avail of the mechanism and also allowsdirect access to the Chairperson of the Audit Committee in exceptional cases. We further affirm that no employeehas been denied access to the Audit Committee.

General Body Meeting

Details of Annual General Meetings (AGM) of the Company held for the last three years:

Financial Year Day, date & Time Location

2012-13 Monday, September 23, 2013, 11.30 A.M Sri. Shivarathreeshwara Centre, JSS Circle,1st Main, 38th Cross, 8th Block, Jayanagar,Bangalore - 560070

2013-14 Monday, September 29, 2014, 11.30 A.M NIMHANS Conventional Hall, Hosur Road,Bangalore - 560 029

2014-15 Friday, September 18, 2015, 3.00 P.M Sri. Shivarathreeshwara Centre, JSS Circle, 1st Main,38th Cross, 8th Block, Jayanagar, Bangalore-560070



The approval of the shareholders was sought through postal ballot for the below mentioned transactions pursuant toSection 110 of the Companies Act, 2013, read with Rule 22 of the Companies (Management and Administration) Rules2014 as on the date of this report.

Special Resolutions passed during the last 3 Years

Date of AGM Number of Details of Special Resolution passedSpecial Resolutions

Monday, September 23, 2013 1 To appoint Mr. Gautam Chakravarti, asWhole-time Director & Chief Executive Officerof the Company for 3 years with effect fromApril 1, 2014 to March 31, 2017.

Monday, September 29, 2014 2 Approval of Shareholders has beenobtained for an amount of Rs. 500 Croresas borrowing powers over and above theaggregate of the paid up share capital andfree reserves of the Company

Consent of the Shareholders obtained todelegate such authority to any person orpersons to hypothecate, mortgage, chargeand /or in any other way encumber all orany movable and immovable assets of theCompany.

Friday, September 18, 2015 1 To appoint Mr. P. Ramababu, as Vice Chairman& Managing Director of the Company for 3years with effect from 25th May, 2015.

Postal Ballot

Sl. No. Type of Resolution Particulars

1 Special Resolution Transfer/Sale of land, Building and related assets pertaining to the Company’sproperty at No.40/1-1 (Old No. 17/D) Industrial Suburb, Ward No.10, 1st and2nd Stage, Mahalakshmipura, Yeshwanthpur, Bangalore

2 Special Resolution Transfer/Sale of land, Building and related assets pertaining to the company’sproperty at Nacharam, Hyderabad.

3 Special Resolution Transfer/Sale of land, Building and related assets pertaining to the Company’sproperty at Plot NO.28D & 28E in Sy. No 318 & 51 in Belavadi Industrial Area,Belavadi Village, Kasaba Hobli, Mysore Taluk, Mysore District.

4 Special Resolution Transfer/Sale of land, Building and related assets pertaining to the Company’sproperty at, No.61, 1st Main, Industrial Suburb, IInd Stage, Yeshwanthpur,Bangalore.

Procedure of Postal Ballot

In compliance with Section 108 and 110 and other applicable provisions of the Companies Act, 2013, read with therelated Rules, the company provides electronic voting (e-voting) facility to all its members. The company engages theservices of NSDL for the purpose of providing e-voting facility to all its members. The members have the option to voteeither by physical ballot or through e-voting.

The company dispatches the postal ballot notices and forms along with postage prepaid business reply envelopes toits members whose names appear on the register of members/list of beneficiaries as on a cut-off date. The postalballot notice is sent to members in electronic form to the email addresses registered with their depository participants(in case of electronic shareholding) / the Company’s registrar and share transfer agents (in case of physical shareholding).The company also publishes a notice in the newspaper declaring the details of completion of dispatch and otherrequirements as mandated under the Act and applicable Rules.

Voting rights are reckoned on the paid-up value of the shares registered in the names of the members as on the cut-off date. Members desiring to exercise their votes by physical postal ballot forms are requested to return the forms,duly completed and signed, to the scrutinizer on or before the close of the voting period. Members desiring toexercise their votes by electronic mode are requested to vote before close of business hours on the last date ofe-voting.

The scrutinizer submits his report to the Chairman, after the completion of scrutiny, and the consolidated results ofthe voting by postal ballot are then announced by the Chairman/ authorized officer. The results are also displayed onthe Company website, www.gokaldasexports.com besides being communicated to the stock exchanges, depositoryand registrar and share transfer agent. The last date for the receipt of duly completed Postal Ballot Forms or e-votingshall be the date on which the resolution would be deemed to have been passed, if approved by the requisite majority.

29

Person who conducted the Postal Ballot exercise – Mr. Nagendra D Rao, Practicing Company Secretary (MembershipNo. FCS - 5553 and C P NO. 7731)

Details of Special Resolution is proposed to be conducted through postal Ballot – None.

Shifting of Registered Office

The Company has shifted its registered office from No. 70, Mission Road, Bengaluru - 560 027 to No. 16/2, ResidencyRoad, Bengaluru – 560 025 with effect from 11th December, 2015. Necessary filing and intimation has been made tothe statutory authorities.

Insider Trading

Pursuant to the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, the Companyhas prescribed a Code of Conduct for Prevention of Insider Trading and a Code of Corporate Disclosure Practices.

The Company observes a closed period for trading in securities of the Company by the Directors/Officers and DesignatedEmployees of the Company for a minimum period of seven days prior to the close of the quarter/half year/year and upto 24 hours after the date on which the results for the respective quarter/half year/year are declared.

Auditor’s Certificate on Corporate Governance

As required under Clause 49 of the Listing Agreement / SEBI(Listing Obligations and Disclosure Requirements)Regulations, 2015 a certificate from the Statutory Auditors’ is obtained regarding compliance of conditions ofcorporate governance and is annexed and forms part of the Directors’ Report.

Managing Director & Chief Financial Officer Certificate

As required by Clause 49 of the Listing Agreement / Regulation 17(8) of SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015, the certificate issued by the Managing Director and CFO on financial statementsetc., is provided in the Annual Report.

Means of Communication

The annual audited financial results, the quarterly / half yearly unaudited financial results are generally published inthe Financial Express and Vijaya Vani (a regional daily published from Bangalore). These were not sent individually tothe shareholders. The quarterly and the annual results of the Company are e-mailed/online filing/ and mailed to thestock exchanges on which the Company’s shares are listed, immediately of closure of meeting of the Board ofDirectors.

Investor Grievances and Share Transfer

The Company has a Board level Stakeholders’ Relationship Committee to examine and redress shareholders’ andinvestors’ complaints. The status on complaints and share transfers is reported to the Board. For matters like dividends,change of address, refunds, demat, remat of shares etc., the shareholders/investors communicate with KarvyComputershare Private Limited, who are the Registrar and Share Transfer Agent of the company. Their address is givenin the section on General Shareholder Information.General Shareholder information:

Annual General Meeting J N Tata Auditorium, National Science Symposium Complex,Sir CV Raman Avenue, Near Indian Institute of Science, Malleswaram18th Cross, Kodandarampura, Bengaluru, Karnataka – 560 012.3.00 P.M - 26th September, 2016, Monday.

Date of Book Closure September 21, 2016 (Wednesday) to September 26, 2016 (Monday),(both days inclusive)

Financial Results Calendar (tentative) Second week of August, 2016 - Unaudited Results for the quarter andthree months ended June 30, 2016.

Second week of November, 2016- Unaudited Results for the quarter andSix months ended September 30, 2016.

First week of February, 2017 - Unaudited Results for the quarter and ninemonths ended December 31, 2016.

Fourth week of May, 2017 - Audited Results for the year endedMarch 31, 2017

Listing on Stock Exchanges National Stock Exchange of India Limited, Mumbai (Scrip Code - GOKEX)Bombay Stock Exchange Limited, Mumbai (Scrip Code - 532630)

International Securities INE887G01027Identification Number (ISIN)

Corporate Identification Number (CIN) L18101KA2004PLC033475


Compliance with Non-Mandatory Requirements

1. The Board: The Company does not maintain a separate office for non-executive Chairman. The independentdirectors have requisite qualification and experience to act as director on the Board.

2. Shareholders Rights: Quarterly results are published in widely circulating national and local daily newspaperssuch as the Financial Express and Vijaya Vani. These were not sent individually to the shareholders.

3. Audit Qualifications: The auditor report does not contain any qualification

4. Separate post of Chairman and Chief Executive Officer: The Company has separate persons to the post ofChairman and Managing Director.

5. Reporting of Internal Auditor: The Internal Auditor reports to the Audit Committee.

Listing Fee

The Company has paid annual listing fees, as prescribed, to the National Stock Exchange of India Limited and BSELimited, Mumbai for the Financial Year 2016-17.

Custodial Fee

Pursuant to the Securities and Exchange Board of India (SEBI) Circular No.MRD/DoP/SE/DEP/CIR-4/2005 dated 28thJanuary, 2005 and MRD/DoP/SE/DEP/CIR-2/2009 dated February 10, 2009, Issuer Companies are required to paycustodial fees to the depositories. Accordingly, the Company has paid custodial fee for the year 2016-17 to NSDLand CDSL on the basis of the number of beneficial accounts maintained by them as on 31st March 2016.

Registrar & Share Transfer Agents:

Share registration and other investor related activities are carried out by our Registrar and Transfer Agents, M/s.Karvy Computershare Private Limited for both Physical and Demat securities. Their address is given below:

Karvy Computershare Private Limited

Karvy Selenium Tower, B, Plot 31-32,Gachibowli, Financial District,Nanakramguda, Hyderabad - 500 032.Phone : +91 40 44655000Fax : 040 - 2342 0814E-mail: [email protected], www.karvycomputershare.comContact person: Ms. Shobha Anand / Ms. Sravanthi Kodali

Share Transfer System:

Shares sent for transfer in physical form are registered and dispatched within 15 days of receipt of the documents,if documents are found to be in order. Shares under objection are returned within 15 days. Monitoring of ShareTransfers and other investor related matters are dealt with by the Shareholders’ Grievance Committee. The Company’sRegistrars, M/s. Karvy Computershare Private Limited process the share transfers in respect of physical securities ona fortnightly basis and the processed transfers are approved by the authorized Executives of the Company also ona fortnightly basis. All requests for dematerialization of shares, which are in order, are processed within 15 days andthe confirmation is given to the respective depositories, i.e., National Securities Depository Limited (NSDL) andCentral Depository Services (India) Limited (CDSL).


31


Stock Performance:BSE – SENSEX Vs Gokaldas Exports Share Price (Monthly Closing)

Stock price Data:

BSE Limited (BSE) National Stock Exchange of India Ltd (NSE)

High Low No of shares High Low No of sharesMonth (Rs) (Rs) traded (Rs) (Rs) traded

April-15 56.90 54.55 10987 57.25 54.00 11682

May-15 54.70 53.00 13118 54.95 52.50 28478

Jun-15 55.75 53.70 21485 56.35 52.20 18293

Jul-15 89.00 80.75 464488 88.70 80.50 1270314

Aug-15 60.90 57.85 30856 60.75 58.00 55790

Sep-15 59.50 56.85 7816 59.45 57.45 27817

Oct-15 57.50 56.10 6605 58.40 56.50 29054

Nov-15 68.10 66.10 96385 68.20 66.00 192429

Dec-15 67.85 65.50 43778 67.70 66.00 86082

Jan-16 52.50 50.55 19012 52.50 50.40 126154

Feb-16 59.50 57.10 33727 60.30 56.50 75339

Mar-16 62.85 61.30 10411 63.10 61.00 55561


CORPORATE GOVERNANCE REPORTNSE – S&P CNX NIFTY V/s Gokaldas Exports Share Price (Monthly Closing)

Shareholding Pattern as on March 31, 2016:Sl. Description No. of Total Shares %EqutiyNo. Shareholders

1 Foreign Promoters Bodies Corporate 1 1,99,83,742 57.442 Resident Individuals 15779 86,21,868 24.78

3 Bodies Corporate 397 43,95,805 12.64

4 Indian Financial Institutions 2 3,26,746 0.94

5 H U F 614 6,62,599 1.906 Non Resident Indians 274 5,32,961 1.53

7 Clearing Members 54 73,498 0.21

8 Banks 1 81,755 0.249 NBFC 1 2,100 0.01

10 Employees 13 1,03,083 0.30

11 Foreign Institutional Investor 1 5,169 0.01

Total: 17137 3,47,89,326 100.00

33


Distribution of Shareholding on March 31, 2016:

Slno Category (Shares) No. of Holders % To Holders Amount % of Amount

1 1 - 5000 15,714 91.70 1,32,50,380 7.622 5001 - 10000 620 3.62 49,04,500 2.82

3 10001 - 20000 347 2.02 49,97,570 2.87

4 20001 - 30000 165 0.96 42,49,580 2.44

5 30001 - 40000 67 0.39 23,86,745 1.376 40001 - 50000 57 0.33 26,94,415 1.55

7 50001 - 100000 85 0.50 61,65,375 3.54

8 100001 and above 82 0.48 13,52,98,065 77.78

TOTAL: 17,137 100.00 17,39,46,630 100.00

Dematerialization of shares and Liquidity as on March 31, 2016:

No of Shares % of Shares No of Shareholders % of Shareholders

3,47,85,374 100.00 17095 99.98%

Sl. No. Category No. of Holders Total Shares % To Equity

1 PHYSICAL 42 3,952 0.01

2 NSDL 11641 3,03,55,235 87.25

3 CDSL 5454 44,30,139 12.73

Total: 17137 3,47,89,326 100.00

Sl. No. Address

1. Carnival Clothing Co, No.2/A-1,Chikkaveeranna Road Cross,Bannimantap Etn, Mysore – 15, Karnataka

2. Euro Clothing Co - I, No.122/1,Doddabidarakallu Village, Yeshwanthpur – 560 022Bengaluru, Karnataka

3. Euro Clothing Company IIT.B.Road Srirangapatna, Mandya,Karnataka

4. Gokaldas Exports Ltd, R &D -INo.68, Mission Road,Bengaluru - 560 027, Karnataka

5. Gokaldas Exports LtdSez Division, Plot No.6/1, Phase - 2, Mepz - Sez,Tambaram, NH - 45, Chennai - 600 045, Tamil Nadu

6. Global Garments -Unit-INo.17/1-38/4 Industrial Suburb,Bengaluru, Karnataka

Sl. No. Address

Plant Location

No of Shares in Demat form as on March 31, 2016

Sl. No. DP Id Folio/Client ID

Name of concern/ person Shares % Equity

1 IN301348 20015218 Blackstone FP Capital Partners 1,99,83,742 57.44(Mauritius) V- B Subsidiary Ltd.

2 IN302927 10137278 Shinano Retail Private Limited 1,413,513 4.06

3 IN302927 10121536 Ojasvi Trading Private Limited 8,67,000 2.49

4 IN301022 10109561 Zaki Abbas Nasser 3,70,000 1.06

5 IN300476 10545253 Chetan Jayantilal Shah 3,41,000 0.98

6 IN300476 10040825 Bhadra Jayantilal Shah 3,25,000 0.93

7 IN300476 10040809 Jayantilal Premji Shah 3,04,000 0.87

8 IN300812 10000012 Life Insurance Corporation of India 2,99,484 0.86

9 39900 12039900 Sudhir Shivji Bheda 1,07,346 0.3100001533

10 33200 12033200 Angel Fincap Private Limited 93,795 0.2707719863

Top ten shareholders of the company as on March 31, 2016



Sl. No. Address Sl. No. Address

Address for Correspondence

Registered office w e f 11th December, 2015# 16/2, Residency Road Bengaluru – 560025Phones: 080-41272200Email: [email protected] [email protected]

7. Global Garments – Unit IIAt Ring Road, near Gubbi Gate Ring Road CircleTumkur - 572 101

8. Global Garments-III, No.44, 3rd Cross,Industrial Suburb, Yeshwanthpur,Bengaluru - 560 022, Karnataka

9. Gokaldas India, No.21B & 21C, SurveyNo.34,35,36 & 37, Nallakadaranahalli,Peenya II Stage, Industrial Area, Peenya,Bengaluru - 560 058, Karnataka

10. Hinduja Proc & Fins Unit, No.2, 5th Cross,Mysore Road, Bengaluru - 560 023, Karnataka

11. International Clothing Company – I#B2, B3 & B4, Indl Estate, Madanapalli - 517 325,Andhra Pradesh

12. International Clothing Company-IISurvey No.113, Hongasandra Village, BegurHobli, (Near Bhandary Factory) 7th Mile,Hosur Road, Bengaluru - 560 068, Karnataka

13. Indigo Blues, Plot No-2, KIADB Industrial Area,Doddaballapur - 581 203, Karnataka

14. J.D.Clothing Company,No.9, Rajajinagar Industrial Estate,Bengaluru - 560 010, Karnataka

15. Luckytex-III, No.17/A-34/A-1,Industrial Suburb, Yeshwanthpur,Bengaluru - 560 022, Karnataka

16. Sri Krishna Industries, No.25/26,3rd Main Road, Industrial Suburb,Yeshwanthpur, Bengaluru - 560 022, Karnataka

17. Triangle Apparels – VI, # 25/26,3rd Main Road, Industrial Suburb,Yeshwanthpur, Bengaluru - 560 022, Karnataka

18. Venkateshwara Clothing Company - IINo.10, KHB, Colony Industrial Area,Yelahanka, Bengaluru - 560 064, Karnataka

19. Wearcraft Apparels – INo.17/1-38/4-1, Industria l Suburb,Yeshwanthpur, Bengaluru - 560 022, Karnataka

20. The Wearwel-IIndustrial Estate N.H-206, Tiptur,Karnataka

21. Gokaldas Exports Ltd – Unit I (Hassan)Plot No.119, KIADB Growth Centre, SH – 57,Hassan – 573201, Karnataka

22. Luckytex Unit INo. 17/A-34/A-1, Industrial Suburb,Bengaluru - 560 022, Karnataka

23. Atlantic Apparels – III – HyderabadSurvey No. A-7/1, Nacharam, RangareddyDistrict, Hyderabad - 500 076, Andhra Pradesh

24. Carnival Clothing Company-IIBenganur Village Bangarpet - KGF Road,Bangarpet, Karnataka

Registrar and Transfer Agent:

Ms. K. Shobha Anand, Senior ManagerKarvy Computershare Private Limited(Unit: Gokaldas Exports Limited)Karvy Selenium Tower, B, Plot 31-32,Gachibowli, Financial District,Nanakramguda, Hyderabad - 500 032.Phone : 040-6716 1653

35

CORPORATE GOVERNANCE REPORTMANAGING DIRECTOR & CHIEF FINANCIAL OFFICER CERTIFICATION

ToThe Board of DirectorsGokaldas Exports Ltd

A. We have reviewed financial statements and cash flow statement for the year ended 31st March, 2016 and that tothe best of our knowledge and belief:

(i) These statements do not contain any materially untrue statement or omit any material fact or containstatements that might be misleading

(ii) These statements together present a true and fair view of the listed entity’s affairs and are in compliance withexisting accounting standards, applicable laws and regulations.

B. There are, to the best of our knowledge and belief, no transactions entered into by the listed entity during the yearwhich are fraudulent, illegal or violative of the listed entity’s code of conduct.

C. We are responsible for establishing and maintaining disclosure controls and procedures and internal controlsover financial reporting for the Company, and we have:

(i) Designed such disclosure controls and procedures to ensure that material information relating to the Company,including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared.

(ii) To provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes.

(iii) Evaluated the effectiveness of the Company’s disclosure, controls and procedures.

(iv) Disclosed in this report any change in the Company’s internal control over financial reporting that occurredduring the Company’s most recent fiscal year that has materially affected, or is reasonably likely to materiallyaffect, the Company’s internal control over financial reporting.

D. We have disclosed, based on our most recent evaluation, wherever applicable, to the Company’s auditors and theaudit committee of the Company’s Board of Directors(and persons performing the equivalent functions):

(i) There were no deficiencies in the design or operation of internal controls, that could adversely affect thecompany’s ability to record, process, summarize and report financial data, and there have been no materialweaknesses in internal controls over financial reporting including any corrective actions with regard todeficiencies.

(ii) There were no significant changes in internal controls during the year covered by this report.

(iii) All significant changes in accounting policies during the year, if any, and that the same have been disclosedin the notes to the financial statements.

(iv) There were no instances of fraud of which we are aware, that involve the Management or other employeeswho have a significant role in the Company’s internal control system.

E. We further declare that all Board members and senior managerial personnel have affirmed compliance with theCode of conduct for the current year.

For Gokaldas Exports Limited

Place: Bengaluru P. Ramababu Sathyamurthy ADate: August 9, 2016 Vice Chairman & Managing Director Chief Financial Officer



Auditor’s Certificate on compliance with the condition of Corporate Governance

To

The Members ofGokaldas Exports Limited

We have examined all relevant records of M/s. Gokaldas Exports Ltd for the purpose of certifying compliance ofconditions of Corporate Governance under Clause 49 of the Listing Agreement(s) entered into with Indian StockExchanges (Upto November, 2015) and as stipulated in Chapter IV read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations, 2015 for the financial year ended on March 31, 2016.

The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examinationwas limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance ofthe condition of the Corporate Governance as stipulated in the said Clause/Regulations.

In our opinion and to the best of our information and according to the explanations given to us, we certify that theCompany has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the ListingAgreement and/or Chapter IV read with schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015.

We further state that such compliance is neither an assurance as to the future viability of the Company nor theefficiency or effectiveness with which the management has conducted the affairs of the Company.

For Girish Murthy & KumarChartered AccountantsFirm Registration Number: 000934S

per A.V. Satish KumarPartnerMembership No : F- 26526

Place : BengaluruDate : August 9, 2016

37

MANAGEMENT DISCUSSION AND ANALYSIS

Introduction

Gokaldas Exports Limited (GEL) is one of the leading apparel exporters of India and has been serving large globalretailers since its inception in the year 1978. GEL, an ISO 9001:2001 certified company,operates from 20 unitsspread across the states of Karnataka, Tamil Nadu and Andhra Pradesh and has installed capacity to produce morethan 2.5 million garments per month. GEL provides employment to about 22,500 people.

GEL blends its manufacturing expertise with state of the art design capabilities to provide multiproduct offerings.GEL’s reliability and consistent quality from design to delivery at the right cost helps to meet customer demands.

GEL has a diversified product portfolio across various categories of garments for men, women as well as children.Contribution of women’s garments to revenue has grown from 38% in 2014-15 to 50% in 2015-16 making it thelargest category. GEL’s expertise lies in manufacturing tops and outerwear which very few manufacturers in Indiacan match. The chart below depicts various categories catered to by GEX:

Industry Scenario

The global apparel retail market is valued at USD 1.1 trillion with EU (32%), US (20%), China (14%), Japan (10%)contributing to 75% of the market.India contributed about 4% of the global apparel exports in 2015.

The Government of India implemented three major initiatives during this financial year to promote the apparelexports industry.

• Interest subvention scheme of 3% on all Rupee denominated pre and post shipment credit

• Enhanced duty drawback capping

• 2% export benefit on all exports to notified countries

Category Movement

The following graph shows the product mix for the last two years. GEL is focusing on high margin products viz.tops and jackets.The share of business from jackets has increased from 35% in 2013-14 to 39% in 2015-16 and topshas increased from 20% to 29%. Below exhibit illustrates the wide range of products manufactured by the companyto meet customer needs and continuously build upon its capabilities to cater to the changing market requirements.


USA Apparel Imports from Key countries

*Source- Ministry of Commerce, US. Government

CountryCY

2014CY

2015YoY Growth

CY 2015MarketShare

CY 2014

MarketShare

CY 2015

China 29,794 30,541 2.5% 36.4% 35.9%

Vietnam 9,269 10,564 14.0% 11.3% 12.4%

Bangladesh 4,834 5,401 11.7% 5.9% 6.3%

Indonesia 4,833 4,938 2.2% 5.9% 5.8%

India 3,401 3,665 7.8% 4.2% 4.3%

Total 81,781 85,165 4.1% 100.0% 100.0%

MANAGEMENT DISCUSSION AND ANALYSISApart from this, the new textile policy announced recently by the Govt. of India will promote employment generation,economies of scale and boost exports. It is slated to generate over 1 crore jobs in the textile and apparel industry,attract investments of about INR 74,000 crore and increase exports by $30 billion over the next three years. Withsupport from the textile policy, India’s apparel export is expected to increase from about $17 billion to $40 billionover the next three years.

Source: UN Comtrade, Ministry of Textiles

The volatility in the market and currencies following Britain’s decision to exit the EU could hurt the Indian apparelmarket.However, it is unlikely to have a major impact on GEL due to the low GBP exposure. Demand scenario islooking up in the US with the economy showing signs of improvement. Intra-Asia trade is likely to expand furtherwith a growth in demand and new Trade agreements viz. ASEAN and SAFTA. Domestic growth will be driven by theshift towards organised retail and growth in online retail.

On the supply side, China continues its dominance with over one-third market share. There is a strong indication offall in demand for apparel manufactured in China due to rising costs in the country. This demand is being capturedby Vietnam, Indonesia, Bangladesh and India.

The U.S apparel market is the largest in the world, comprising of about a fourth of the global market and has amarket value in excess of 225 billion U.S dollar.

As shown in the below table, exports from India to USA has grown by 7.8% in CY15 over CY14. The total value ofapparel exports to the US has increased by 4% during the same period.

39

MANAGEMENT DISCUSSION AND ANALYSISGEL’s geo-wise revenue share is in line with the company strategy. The share of revenue from Europe and NorthAmerica has increased over last year and share from Asia has declined significantly.

GEL’s revenue share from various geographical locations in 2013-14,2014-15 and 2015-16 is shown below:

Opportunities and Challenges

India’s textile industry is one of the leading textile industries in the world, exporting to over 100 countries. It is asignificant contributor to India’s overall export earnings and employs over 35 million people directly, making it thesecond largest source of employment after agriculture in the country.

India’s apparel exports grew 4% YoY in 2015-16. With a market share of 4% of global apparel trade, India has anenormous opportunity to grow. Some strategic advantages are listed below -

• Large fiber base: it is the 3rd largest cotton producing country in the world (second only to US and China)

• Second largest cotton yarn exporter

• Large pool of skilled labour and competitive wage rate

• Design and product development capabilities

• Integrated and efficient supply chain

• Higher compliance standards as compared to some of the Asian counterparts

• Stable political and social environment which is attractive to buyers in North America and Europe

• Growing domestic demand

Further, rising wage costs In China and quality related issues and the recent disturbance in Bangladesh could leadto customer migration to India.

However above opportunities are coupled with challenges stemming from macroeconomic forces. Some challengesthat the apparel industry in India continues to face are -

- Uncertain demand from certain parts of western countries

- Pricing pressures at retail level and hence across the value chain

- Rising wage costs on account of minimum wage increase and reduced availability of skilled labour

Bangladesh exports continue to enjoy duty benefits & Most Favoured Nation status for imports in certain Europeancountries. Vietnam’s market share has increased from 4% in 2014 to 5% in 2015.

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

Revenue Contribution


Key Focus Areas

Key focus areas for the company focused towards growth:

• Focus on profitable growth by increasing share of business with existing customers as well as focus on developingnew strategic customers

• Focus on increasing the share of tops & jackets as part of product category focus

• Diversify geographic footprint

Key focus areas for improving profitability:

• Reduce operating costs by consolidating factories

• Maximize capacity utilization and sewing efficiency

• Set up production capacity in tier II and tier III towns to attract low cost labour with low attrition rates

• Focus on financial management

Risks and concerns

As an export driven enterprise with more than 80% revenues being denominated in USD/EURO, we are exposed tocurrency fluctuation risks. Forex related risks are being mitigated through robust foreign currency risk managementpractices.

Rise in wage costs and inflationary conditions in the country may have an adverse impact on the profitability of thecompany. Further, there could be pricing pressure from customers in the current macroeconomic scenario.

Any change in government policies which adversely impacts us may hurt our competitiveness.

Change in government policies of competitive countries favouring the respective country's industry may affect thecompetitiveness of the Indian apparel industry.

Internal control systems and their adequacy

The Company is committed to maintaining an effective system of internal control to facilitate accurate, reliable andspeedy compilation of financial information, safeguarding the assets and interests of the Company and ensuringcompliance with all laws and regulations. The Company has an internal control function to monitor, review andupdate internal controls on an ongoing basis. The Company has put in place a well-defined organization structure,authority levels and internal guidelines for conducting business transactions.

The Company has appointed independent internal auditors, who monitor and review transactions independentlyand report directly to the Audit Committee, which consists of entirely independent directors, on quarterly basis. TheInternal Auditors conduct audit on all key business areas as per pre-drawn audit plan. All significant audit observationsand follow up actions are reported to the Audit Committee along with Internal Audit reports and management’sresponses/replies. The minutes of Audit Committee are reviewed by the Board.

The Audit Committee periodically reviews audit plans, observations and recommendations of the internal auditorsas well as external (statutory) auditors with reference to significant risk areas and adequacy of internal controls.

Financial Highlights

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013 andgenerally accepted accounting principles (GAAP) in India. The management accepts the responsibility for theintegrity and objectivity of these financial statements and the basis for the various estimates and judgments usedin preparing the financial statements.

Some of the key performance indicators are given belowRs in Lacs

Particulars (Consolidated)2015-16 2014-15

Gross Revenue 117,513 113,749

Profit Before Tax ( PBT) 5,332 3,552

PBT to Gross Revenue (%) 4.5% 3.1%Profit After Tax 6,134 3,469

PAT to Gross Revenue (%) 5.2% 3.0%

Earnings Per Share ( EPS) Rs. 18.0 10.0

MANAGEMENT DISCUSSION AND ANALYSIS

41

Human Resources

We believe that people are our greatest asset and we compete for business through the people we employ. Various

learning and development initiatives have been undertaken during the year to strengthen the human capital of the

company. Periodic skill up-gradation has been a continuous process.

The HR processes and employee engagement activities supplement the facilitation of better performance and skill

evaluation, higher employee satisfaction and skill and career development of our employees.

As in the past, the industrial relations continue to remain cordial at all factories / units of the Company. The

Company has around 22,500 employees as on March 31, 2016.

Caution Statement

Investors are cautioned that this discussion contains statements that involve risks and uncertainties. Words like

anticipate, believe, estimate, intend, will, expect and other similar expressions are intended to identify such forward

looking statements. The Company assumes no responsibility to amend, modify or revise any forward looking

statements, on the basis of any subsequent developments, information or events. Besides, the Company cannot

guarantee that these assumptions and expectations are accurate or will be realized and actual results, performance

or achievements could thus differ materially from those projected in any such forward looking statements.


To the Members of Gokaldas Exports Limited

Report on the Financial Statements

We, Girish Murthy & Kumar and S.R. Batliboi & Associates LLP, have audited the accompanying standalone financialstatements of Gokaldas Exports Limited (“the Company”), which comprise the BalanceSheet as at March 31, 2016,the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summaryof significantaccounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,2013 (“the Act”)with respect to the preparation of these standalone financial statements that give a true and fairview of the financial position,financial performance and cash flows of the Company in accordance with accountingprinciples generally accepted in India, including the Accounting Standards specified under section 133 of the Act,read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; and the design,implementation and maintenance of adequate internal financial controls that were operating effectively for ensuringthe accuracy and completeness of the accounting records, relevant to the preparation and presentation of thefinancial statements that give a true and fair view and are free from material misstatement, whether due to fraud orerror.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We havetaken into account the provisions of the Act, the accounting and auditing standards and matters which are requiredto be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted ouraudit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, asspecified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements.The procedures selected depend on the auditor’s judgement, including the assessment of therisks of material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal financial control relevant to the Company’s preparation of the financialstatements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of thefinancial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalonefinancial statements give the information required by the Act in the manner so required and give a true and fair viewin conformity with the accounting principles generally accepted in India of the state of affairs of the Company as atMarch 31, 2016, its profit, and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s report) Order, 2016 (“the Order”) issued by the Central Governmentof India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1, a statement on thematters specified in paragraphs 3 and 4 of the Order.

INDEPENDENT AUDITOR’S REPORT

43

2. As required by section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledgeand belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by the Company so far as itappears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are inagreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standardsspecified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of written representations received from the directors as on March 31, 2016, and taken onrecord by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from beingappointed as a director in terms of section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Companyand the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to thisreport;

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information andaccording to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financialstatements – Refer Note 26 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which therewere any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and ProtectionFund by the Company.


for Girish Murthy & Kumar for S.R. Batliboi & Associates LLPChartered Accountants Chartered AccountantsICAI Firm Registration No: 000934S ICAI Firm Registration Number: 101049W/E300004

per A.V. Satish Kumar per Navin AgrawalPartner PartnerMembership No: F- 26526 Membership No: 056102

Place: Bengaluru Place: BengaluruDate: May 30, 2016 Date: May 30, 2016


ANNEXURE 1 REFERRED TO IN CLAUSE 1 OF PARAGRAPH ON REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS OF OUR REPORT OF EVEN DATE

Re: Gokaldas Exports Limited (“The Company”)

i. (a) The Company has maintained proper records showing full particulars, including quantitative details andsituation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regularprogramme of verification which, in our opinion, is reasonable having regard to the size of the Companyand the nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by the management, the title deeds of immovableproperties included in fixed assets are held in the name of the Company.

ii. The management has conducted physical verification of inventory at reasonable intervals during the year andno material discrepancies were noticed on such physical verification.

iii. According to the information and explanations given to us, the Company has not granted any loans, securedor unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Act. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Orderare not applicable to the Company and hence not commented upon.

iv. In our opinion and according to the information and explanations given to us, provisions of section 186 of theAct in respect of loans and advances given, investments made and guarantees and securities given have beencomplied with by the Company. There are no loans given to directors including entities in which they areinterested in respect of which provisions of section 185 of the Act are applicable and hence not commentedupon with respect to section 185 of the Act.

v. The Company has not accepted any deposits from the public.

vi. To the best of our knowledge and as explained, the Central Government has not specified the maintenance ofcost records under clause 148(1) of the Act for the products / services of the Company.

vii. (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory duesincluding provident fund, employees’ state insurance, income-tax, sales-tax, service tax, customs duty,excise duty, value added tax, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect ofprovident fund, employees’ state insurance, income-tax, service tax, sales-tax, customs duty, excise duty,value added tax, cess and other material statutory dues were outstanding, at the year end, for a period ofmore than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax,customs duty, excise duty, value added tax and cess on account of any dispute, are as follows:

Name of Nature Demand Amount Period to which Forum wherestatute of dues Amount paid the amount relates dispute is

(Rs. in (Rs. in pendinglakhs) lakhs)

Income Tax Act, Various 278.43 253.43 AY 1995-96 Income Tax1961 disallowances Appellate Tribunal

Central Excise Act, Excise duty 24.88 - FY 2010-11 to Additional1944 2011-12 Commissioner of

Central Excise

Employees’ Penal 30.05 5.00 June to EmployeesProvident Funds and interest etc. August 2008 Provident Fund

Miscellaneous TribunalProvisions Act, 1952

viii. In our opinion and according to the information and explanations given by the management, the Companyhas not defaulted in repayment of dues to bank during the year. The Company did not have any outstandingdues in respect of a financial institution, debenture holders or to government during the year.

ix. According to the information and explanations given by the management, the Company has not raised anymoney by way of initial public offer / further public offer and debt instruments and utilized the term loan forthe purpose for which it was raised.

ANNEXURE TO AUDITORS’ REPORT

45

x. Based upon the audit procedures performed for the purpose of reporting the true and fair view of thefinancial statements and according to the information and explanations given by the management, wereport that no fraud by the Company or no fraud on the Company by the officers and employees of theCompany has been noticed or reported during the year.

xi. According to the information and explanations given by the management, the managerial remuneration hasbeen paid / provided in accordance with the requisite approvals mandated by the provisions of section 197read with Schedule V to the Act.

xii. In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order arenot applicable to the Company and hence not commented upon.

xiii. According to the information and explanations given by the management, transactions with the relatedparties are in compliance with section 177 and 188 of the Act where applicable and the details have beendisclosed in the notes to the financial statements, as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and on an overall examination of the balancesheet, the Company has not made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review and hence, reporting requirements under clause 3(xiv)are not applicable to the Company and not commented upon.

xv. According to the information and explanations given by the management, the Company has not enteredinto any non-cash transactions with directors or persons connected with them as referred to in section 192the of Act.

xvi. According to the information and explanations given to us, the provisions of section 45-IA of the ReserveBank of India Act, 1934 are not applicable to the Company.






Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct, 2013 (“the Act”)

We, Girish Murthy & Kumar and S. R. Batliboi & Associates LLP, have audited the internal financial controls overfinancial reporting of Gokaldas Exports Limited (“the Company”) as of March 31, 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internal financial controls based onthe internal control over financial reporting criteria established by the Company considering the essential componentsof internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementationand maintenance of adequate internal financial controls that were operating effectively for ensuring the orderlyand efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets,the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, andthe timely preparation of reliable financial information, as required under the Act.


Our responsibility is to express an opinion on the Company's internal financial controls over financial reportingbased on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section143(10) of the Act,to the extent applicable to an audit of internal financial controls, both applicable to an audit ofInternal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financial reporting was establishedand maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financialcontrols system over financial reporting and their operating effectiveness. Our audit of internal financial controlsover financial reporting included obtaining an understanding of internal financial controls over financial reporting,assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectivenessof internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, includingthe assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonabledetail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles, and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of the company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition ofthe company's assets that could have a material effect on the financial statements.

ANNEXURE 2 TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF GOKALDAS EXPORTS LIMITED


47

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility ofcollusion or improper management override of controls, material misstatements due to error or fraud may occurand not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting tofuture periods are subject to the risk that the internal financial control over financial reporting may becomeinadequate because of changes in conditions, or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting were operating effectively as atMarch 31, 2016, based on the internal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit of Internal Financial ControlsOver Financial Reporting issued by the Institute of Chartered Accountants of India.






BALANCE SHEET AS AT MARCH 31, 2016

EQUITY AND LIABILITIESShareholder's fundsShare capital 3 1,739.47 1,729.72Reserves and surplus 4 19,543.63 13,915.90

21,283.10 15,645.62Non- current liabilitiesLong-term borrowings 5 - 2,674.00Long-term provisions 6 271.99 278.91

271.99 2,952.91Current liabilitiesShort term borrowings 7 31,304.91 26,204.09Trade payables 8

total outstanding dues of micro enterprises and small enterprises 41.02 27.59total outstanding dues of creditors other than micro enterprisesand small enterprises 10,370.55 10,071.80

Other current liabilities 8 8,005.42 8,558.29Short term provisions 6 1,186.09 994.55

50,907.99 45,856.32 72,463.08 64,454.85

ASSETSNon-current assetsFixed assetsTangible assets 9 9,070.83 12,441.96Intangible assets 9 85.47 70.52Capital work-in-progress 247.64 218.90

9,403.94 12,731.38Non-current investments 10 2,890.62 3,218.43Deferred tax asset (net) 11 959.42 -Long-term loans and advances 12 3,351.85 2,139.24Other non-current assets 13 735.78 657.56

17,341.61 18,746.61Current assetsInventories 14 19,384.11 20,864.65Trade receivables 15 7,984.64 7,732.94Cash and bank balances 16 20,917.54 7,040.98Short-term loans and advances 12 1,578.51 1,420.96Other current assets 13 5,256.67 8,648.71

55,121.47 45,708.24 72,463.08 64,454.85

Summary of significant accounting policies 2.1

All amounts in Indian Rupees in lakhs, except stated otherwise

Notes March 31, 2016 March 31, 2015

The accompanying notes are integral part of the financial statements.For and on behalf of the

As per our report of even date Board of DirectorsGokaldas Exports Limited

for Girish Murthy & Kumar for S R Batliboi & Associates LLP Richard B SaldanhaChartered Accountants Chartered Accountants ChairmanICAI Firm Registration No: 000934S ICAI Firm Registration No: 101049W/E300004 DIN No. 00189029

per A.V. Satish Kumar per Navin Agrawal Padala RamababuPartner Partner Vice Chairman & Managing DirectorMembership No. F-26526 Membership No: 056102 DIN No. 00149649Place: Bengaluru Place: Bengaluru Sathyamurthy ADate: May 30, 2016 Date: May 30, 2016 Chief Financial Officer

Ramya KannanCompany SecretaryPlace: BengaluruDate: May 30, 2016

49

STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED MARCH 31, 2016

INCOMERevenue from operations (gross) 17 112,296.09 107,011.77Less: excise duty 25.67 -Revenue from operations (net) 112,270.42 107,011.77Other income 18 2,826.10 4,617.86

115,096.52 111,629.63ExpensesCost of materials consumed 19 59,832.28 56,388.00(Increase) / decrease in inventories of finished goodsand work-in-progress 20 (291.56) (1,766.81)Employee benefits expense 21 12,183.35 12,673.32Other expenses 22 36,813.88 37,579.67Depreciation and amortisation expense 23 2,046.34 2,991.91Finance costs 24 3,946.32 4,683.27

114,530.61 112,549.36Profit / (Loss) before exceptional items and tax 565.91 (919.73)Exceptional items 25 4,541.81 4,355.31Profit before tax 5,107.72 3,435.58Tax expense:Deferred Tax credit (959.42) -Net Profit for the year 6,067.14 3,435.58Earnings per equity share[nominal value per share : Rs. 5 (2015 - Rs. 5)]

Basic 17.48 9.96

Diluted 17.18 9.87

Weighted average number of shares used in computingbasic earning per equity share 34,701,118 34,503,738

Weighted average number of shares used in computingdiluted earning per equity share 35,314,246 34,803,527




The accompanying notes are integral part of the financial statements.For and on behalf of the

As per our report of even date Board of DirectorsGokaldas Exports Limited





A. CASH FLOW FROM OPERATING ACTIVITIES: Profit before tax 5,107.72 3,435.58 Adjustments

Depreciation and amortisation expense 2,046.34 2,991.91Provision for doubtful deposits and advances 18.40 -Irrecoverable balances written off 208.23 208.41Bad debts written off 273.26 338.08Provision for doubtful debts 489.61 587.96Interest expense 3,235.87 3,934.02Capital work in progress written off 136.23 -Unrealised foreign exchange gains (net) (90.02) (12.11)(Profit)/Loss on sale of assets (net) (9.97) (44.67)Excess provision of earlier years written back (114.54) (1,179.53)Interest earned (1,196.79) (220.79)Exceptional items (4,541.81) (4,355.31)

Operating profit before working capital changes 5,562.53 5,683.55

(Increase)/decrease in inventories 1,480.54 (672.92) (Increase)/decrease in trade receivables (1,291.37) 1,471.57 (Increase)/decrease in other current assets 3,706.89 (251.11) (Increase)/decrease in long-term loans and advances (959.20) (187.27) (Increase)/decrease in short-term loans and advances (365.78) 509.45 Increase/(decrease) in trade payables 350.11 (864.83) Increase/(decrease) in other current liabilities (41.89) 1,191.97 Increase/(decrease) in long term provisions (6.92) (409.28) Increase/(decrease) in short term provisions 191.54 650.61

Cash Generated from /(used in) Operations 8,626.45 7,121.74 Direct taxes paid (net of refunds) (182.99) (190.73)

Net cash flow from operating activities 8,443.46 6,931.01

B. CASH FLOW FROM INVESTING ACTIVITIES: Purchase of fixed assets, including CWIP and capital advances (702.61) (552.71) Proceeds from sale of fixed assets 4,343.25 967.81 Deposits redeemed (maturity more than 3 months) 15,532.21 1,792.25 Deposits made (maturity more than 3 months) (28,935.13) (4,019.89) Proceeds from sale of current investment 1,045.00 - Interest received 387.48 112.06

Net Cash Flow from / (used in) investing activities (8,329.80) (1,700.48)


PARTICULARS March 31, 2016 March 31, 2015

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016

51


PARTICULARS March 31, 2016 March 31, 2015

C. CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from issuance of equity share capital 64.80 70.42 Repayment of long-term borrowings (1,840.04) (1,718.00) Proceeds from short-term borrowings 98,776.96 88,569.20 Repayment of short-term borrowings (93,282.32) (86,854.98) Unclaimed dividend transferred to Investor education and protection fund (0.15) (0.45) Interest paid (3,281.05) (3,744.75)

Net cash flow used in financing activities 438.20 (3,678.56)

D. Net increase in cash and cash equivalents (A+B+C) 551.86 1,551.97 E. Cash and cash equivalents at the beginning of the year 4,911.68 3,359.71

F. Cash and cash equivalents at the end of the year 5,463.54 4,911.68 Components of Cash and Cash Equivalents Cash on hand 109.45 18.26 Balance with banks : -- in deposit account - 10.12 -- in current accounts 5,354.09 4,883.15 -- in unpaid dividend accounts (restricted use) - 0.15

Total cash and cash equivalents 5,463.54 4,911.68


CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016

For and on behalf of theAs per our report of even date Board of Directors

Gokaldas Exports Limited





1. Corporate Information

Gokaldas Exports Limited (‘the Company’) was incorporated on March 1, 2004 by converting the erstwhilepartnership firm Gokaldas India under Part IX of the Companies Act, 1956 (“the Act”). Pursuant to the order ofthe Hon’ble High Court of Karnataka dated November 20, 2004, Gokaldas Exports Private Limited and TheUnique Creations (Bangalore) Private Limited had been amalgamated with the Company, with April 1, 2004being the appointed date. The Company currently operates a 100% Export Oriented Unit, a Domestic Tariff AreaUnit and a Special Economic Zone Unit.

The Company is a public company domiciled in India and its shares are listed on two stock exchanges in India.The Company is engaged in the business of design, manufacture, and sale of a wide range of garments for men,women, and children and caters to the needs of several leading international fashion brands and retailers. Theprincipal source of revenue for the Company is from export of garments and related products.

2. Basis of preparation of financial statements

The financial statements of the Company have been prepared in accordance with the generally acceptedaccounting principles in India (Indian GAAP). The Company has prepared these financial statements to complyin all material respects with the accounting standards notified under section 133 of the Companies Act 2013,read together with paragraph 7 of the Companies (Accounts) Rules, 2014.The financial statements have beenprepared under the historical cost convention on an accrual basis except in case of assets for which provisionfor impairment is made and revaluation is carried out and derivative financial instruments which have beenmeasured at fair value.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

2.1 Summary of Significant accounting policies

a) Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requiresmanagement to make estimates and assumptions that affect the reported amounts of revenues, expenses,assets, and liabilities and disclosure of contingent liabilities at the date of the financial statements and the resultsof operations during the reporting period. Although these estimates are based upon management’s best knowledgeof current events and actions, uncertainty about these assumptions and estimates could result in outcomesrequiring material adjustment to the carrying amounts of assets and liabilities in future periods.

b) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Companyand the revenue can be reliably measured.

Revenue from sale of goods is recognized when significant risks and rewards of ownership of the goods aretransferred to the customer.

Export incentives are recognized on accrual basis in accordance with the applicable schemes formulated,by the Government of India and where there is reasonable assurance that the enterprise will comply withthe conditions attached to them.

Revenues from job work contract are recognized as and when services are rendered.

Dividend income on investments is accounted when the right to receive the dividend is established as atreporting date.

Interest income is recognized on a time proportion basis taking into account the amount outstanding andthe rate applicable. Insurance / other claims are recognized on acceptance basis.

c) Hedge accounting

The Company is exposed to foreign currency fluctuations on foreign currency assets, liabilities and forecastedcash flows denominated in foreign currencies. The Company limits the effects of foreign exchange ratefluctuations by following established risk management policies including the use of forward cover derivatives.The Company enters into derivative contract for sale of US dollars, GBP and Euros, where the counterpartyis a bank.

The Company has adopted principles of hedge accounting as set out in Accounting Standard (AS)30,"Financial Instruments: Recognition and Measurement", to the extent that the adoption does not conflictwith existing accounting standards and other authoritative pronouncements of the Company Law andother regulatory requirements.

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016

(All amounts in Indian Rupees in lakhs, except stated otherwise)

53

Based on the recognition and measurement principles of hedge accounting set out in AS 30, the effectiveportion on changes in the fair values of derivative financial instruments designated as cash flow hedges arerecognized directly in reserves / equity and are reclassified to the statement of profit and loss upon theoccurrence of the hedged transaction. The ineffective portion of the gain or loss on the hedging instrumentis recognised immediately in the statement of profit and loss. Changes in fair value relating to derivativesnot designated as hedges are recognized in the statement of profit and loss.

Hedge Accounting is discontinued when the hedging instrument expires or is sold, or terminated, orexercised or no longer qualifies for hedge accounting. Any cumulative gain or loss on the hedging instrumentis recognised in hedging reserve is transferred to statement of profit and loss when forecasted transactionoccurs or when a hedged transaction is no longer expected to occur.

d) Fixed assets and depreciation / amortization (tangible and intangible)

Fixed assets are stated at cost of acquisition / construction less accumulated depreciation and impairmentlosses if any, net of grants received, where applicable and subsequent improvements thereto includingtaxes, duties, freight, and other incidental expenses related to acquisition / construction. Any trade discountsand rebates are deducted in arriving at the purchase price.

Depreciation is provided using the written down value method as per the useful lives of the assets estimatedby the management with residual value at 5%, which is equal to the corresponding rates prescribed underschedule II of the Companies Act, 2013.

Estimated useful life (in years)

Buildings 30

Plant & Machinery 15

Electrical Equipments 10

Office Equipments 5Furniture & Fixtures 10

Computers 3

Vehicles 8

Computer software (Intangibles) 2.5

Leasehold improvements are depreciated over the primary lease period or useful life, whichever is lowerwhich ranges between 5 to 10 years.

Intangible assets comprising Know-how (Process improvement costs) are amortized over 36 months.

e) Borrowing Costs

Borrowing costs includes interest, amortisation of ancillary costs incurred in connection with the arrangementof borrowings and exchange differences arising from foreign currency borrowings to the extent they areregarded as an adjustment to the interest cost.

Borrowing costs attributable to acquisition and construction of qualifying assets that necessarily takessubstantial period of time to get ready for its intended use are capitalized as a part of the cost of such asset.All other borrowing costs are expensed in the period they occur.

f) Impairment of tangible and intangible assets

At each reporting date, the Company assesses whether there is any indication that an asset may beimpaired. If any such indication exists, the Company estimates the recoverable amount. If the carryingamount of the asset exceeds its recoverable amount, an impairment loss is recognized in the statementof profit and loss to the extent the carrying amount exceeds the recoverable amount. The recoverableamount is the greater of the asset’s net selling price and value in use. In assessing value in use, theestimated future cash flows are discounted to their present value using a pre-tax discount rate thatreflects current market assessments of the time value of money and the risks specific to the asset. Afterimpairment, depreciation is provided on the revised carrying amount of the asset over its remaininguseful life

g) Inventories

Raw materials, packing materials, stores, spares, and consumables are valued at lower of cost and netrealizable value. Cost is determined on a weighted average basis. However, materials and other items heldfor use in the production of inventories are not written down below cost if the finished products in whichthey will be incorporated are expected to be sold at or above cost.




Finished goods and work in progress are valued at lower of cost and net realisable value after consideringprovision for obsolescence and other anticipated loss, wherever considered necessary. Finished goods andwork in progress includes cost of conversion and other production overheads. Cost is determined on aweighted average basis. Cost of finished goods includes excise duty.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs ofcompletion and estimated costs necessary to make the sale.

h) Foreign currency transactions

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currencyamount the exchange rate between the reporting currency and the foreign currency at the date of thetransaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which arecarried in terms of historical cost denominated in a foreign currency are reported using the exchangerate at the date of the transaction; and non-monetary items which are carried at fair value or othersimilar valuation denominated in a foreign currency are reported using the exchange rates that existedwhen the values were determined.

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting monetary items ofCompany at rates different from those at which they were initially recorded during the year, or reportedin previous financial statements, are recognised as income or as expenses in the year in which they arise.

i) Government Grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that thegrant / subsidy will be received and all attaching conditions will be complied with.

When the grant or subsidy relates to an expense item, it is netted off with the relevant expense. Where thegrant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the relatedasset.

j) Investments

Investments that are readily realizable and intended to be held for not more than a year from the date onwhich such investments are made, are classified as current investments. All other investments are classifiedas long-term investments. Current investments are carried at lower of cost and fair value determined on anindividual investment basis. Long-term investments are carried at cost. However, provision for diminutionin value is made to recognize a decline other than temporary in the value of the investments. On disposal ofan investment, the difference between its carrying amount and net disposal proceeds is charged / creditedto statement of profit and loss.

k) Retirement and Other Employee Benefits

(i) Defined Contribution Plans:

Contributions to provident fund are made at pre-determined rates and charged to the statement ofprofit and loss for the year when the employee renders the services. The Company has no obligation,other than the contribution payable to the provident fund.

(ii) Defined Benefit Plans:

Gratuity liability is accrued in the books based on actuarial valuation on projected unit credit method asat reporting date. Actuarial gains or losses are immediately taken to statement of profit and loss and arenot deferred.

(iii) Compensated absences:

Accumulated leave, which is expected to be utilised within the next twelve months, is treated as short-term employee benefit. The Company treats accumulated leave expected to be carried forward beyondtwelve months, as long-term employee benefit for measurement purposes. Such long-term compensatedabsences are provided for based on the basis of an actuarial valuation using the projected unit creditmethod at the year end. Actuarial gains or losses are immediately taken to statement of profit and loss andare not deferred. The Company presents the leave as a current liability in the balance sheet, to the extentit does not have an unconditional right to defer its settlement for twelve months after the reporting date.



55

l) Taxation

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected tobe paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred income taxes reflectsthe impact of current year timing differences between taxable income and accounting income for the yearand reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at thereporting date. Deferred tax assets are recognised only to the extent that there is a reasonable certainty thatsufficient future taxable income will be available against which such deferred tax assets can be realised. Insituations where the Company has unabsorbed depreciation or carry forward tax losses, deferred tax assetis recognised only to the extent that it has timing differences the reversal of which will result in sufficientincome or there is other convincing evidence that sufficient taxable income will be available against whichsuch deferred tax assets can be realised.

At each reporting date, the Company re-assesses unrecognised deferred tax assets. It recognises deferredtax assets to the extent that it has become reasonably certain or virtually certain, as the case may be thatsufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-downthe carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtuallycertain, as the case may be, that sufficient future taxable income will be available against which deferred taxasset can be realised.

Minimum Alternative Tax (‘MAT’) credit is recognised, as an asset only when and to the extent there isconvincing evidence that the Company will pay normal income tax during the specified period. In the yearin which the MAT credit becomes eligible to be recognized as an asset in accordance with therecommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India,the said asset is created by way of a credit to the statement of profit and loss and shown as MAT CreditEntitlement. The Company reviews the same at each reporting date and writes down the carrying amountof MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Companywill pay normal Income Tax during the specified period.

m) Employee stock compensation cost

Measurement and disclosure of the employee share-based payment plans is done in accordance with theSecurities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the GuidanceNote on Accounting for Employee Share - based Payments, issued by the Institute of Chartered Accountantsof India. The Company accounts for stock compensation expense based on the intrinsic value of the optionsgranted, determined on the date of grant. Compensation expense is amortized over the vesting period ofthe option on a straight - line basis. The accounting value of the options outstanding net of the DeferredCompensation Expense is reflected as Employee Stock Options Outstanding.

n) Accounting for leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leasedterm, are classified as operating leases. Operating lease payments are recognized as an expense in thestatement of profit and loss on a straight-line basis over the lease term.

o) Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probablethat an outflow of resources will be required to settle the obligation, in respect of which a reliable estimatecan be made. Provisions are not discounted to its present value and are determined based on best estimaterequired to settle the obligation at the reporting date. These are reviewed at each reporting date andadjusted to reflect the current best estimates.

p) Segment Reporting Policies

(i) Identification of segments:

The Company's operating businesses are organized and managed separately according to the nature ofproducts and services provided, with each segment representing a strategic business unit that offersdifferent products and services different markets. The analysis of geographical segments is based on theareas in which major operating divisions of the Company operate.

(ii) Basis of allocation:

Assets, liabilities, income and expenditure are allocated to each segment according to the relativecontribution of each segment to the total amount. Unallocated items include general corporate items,




which are not allocated any segment.

(iii) Segment Policies:

The Company prepares its segment information in conformity with the accounting policies adopted forpreparing and presenting the financial statements of the Company as a whole.

q) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equityshareholders (after deducting preference dividends and attributable taxes) by the weighted average numberof equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equityshare to the extent that they were entitled to participate in dividends relative to a fully paid equity shareduring the reporting period. The weighted average number of equity shares outstanding during the periodis adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split;and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable toequity shareholders and the weighted average number of shares outstanding during the period are adjustedfor the effects of all dilutive potential equity shares.

r) Contingent Liability

A contingent liability is a possible obligation that arises from past events whose existence will be confirmedby the occurrence or non-occurrence of one or more uncertain future events beyond the controls of theCompany or a present obligation that is not recognised because it is not probable that an outflow ofresources will be required to settle the obligation. A contingent liability also arises in extremely rare caseswhere there is a liability that cannot be recognised because it cannot be measured reliably. The Companydoes not recognise a contingent liability but discloses its existence in the financial statements.

s) Cash and Cash equivalents

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand andshort-term investments with an original maturity of three months or less.



57

3 SHARE CAPITAL

Authorised shares 2,000.00 2,000.0040,000,000 (2015: 40,000,000) equity shares of Rs. 5 each

Issued, subscribed and fully paid-up34,789,326 (2015 : 34,594,332) equity shares of Rs. 5 each 1,739.47 1,729.72

1,739.47 1,729.72


March 31, 2016 March 31, 2015


(a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

Equity shares 31 March 2016 31 March 2015

No. Amount No. Amount

At the beginning of the year 34,594,332 1,729.72 34,376,000 1,718.80

Add : issued during the year - ESOP 194,994 9.75 218,332 10.92

Outstanding at the end of the year 34,789,326 1,739.47 34,594,332 1,729.72

(b) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 5 per share. Each holder of equity isentitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposedby the Board of Directors is subject to the approval of the shareholders in ensuing Annual General Meeting.

In event of liquidation of the Company, the holders of equity shares would be entitled to receive remainingassets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to thenumber of equity shares held by the shareholders.

(c) Shares held by holding / ultimate holding company and / or their subsidiaries / associates



Holding company :

Blackstone FP Capital Partners (Mauritius) 19,983,742 999.19 19,983,742 999.19

V-B Subsidiary Limited

(d) Details of shareholders holding more than 5% shares in the Company

Equity shares31 March 2016 31 March 2015

No. Shareholding % No. Shareholding %

Blackstone FP Capital Partners (Mauritius) 19,983,742 57.44% 19,983,742 57.77%V-B Subsidiary Limited, Holding companyICICI Bank Limited 27,262 0.08% 3,485,500 10.08%

As per records of the Company, including its register of shareholders / members and other declaration receivedfrom shareholders regarding beneficial interest, the above shareholding represent both legal and beneficialownership of shares.

(e) Shares reserved for issue under optionsFor details of shares reserved for issue under the employee stock option (ESOP) plan of the Company, pleaserefer note 38.


4 RESERVES AND SURPLUS

Capital reservesCapital reserve (on amalgamation) balance as per last financial statements 9,751.19 9,751.19

Securities Premium ReserveBalance as per last financial statements 13,780.81 13,721.31Addition on ESOP's exercised 55.05 59.50Balance as at year end 13,835.86 13,780.81

General ReserveBalance as per last financial statements 2,192.09 2,192.09

Hedging ReserveBalance as per last financial statements 969.06 847.38Changes during the year :Transferred to statement of profit and loss on occurrence of forecastedhedge transaction (969.06) (847.38)Net changes in the fair value of effective portion of outstandingcash flow derivatives 474.60 969.06

474.60 969.06

Deficit in the statement of profit and lossBalance as per last financial statements (12,777.25) (16,099.37)Depreciation adjustment - (113.46)Profit for the year 6,067.14 3,435.58Net deficit in the statement of profit and loss (6,710.11) (12,777.25)

19,543.63 13,915.90

5 LONG-TERM BORROWINGS


March 31, 2016 March 31, 2015


Non-current Current Maturities

31 March 2016 31 March 2015 31 March 2016 31 March 2015

Term loans (secured) :

Indian Rupee loan from bank

(Working capital loan) - 2,674.00 3,041.96 2,208.00

- 2,674.00 3,041.96 2,208.00

(a) Working capital loan from bank carries interest at 14.45% (2015: 14.95%) p.a. The loan is repayable in 35monthly instalments of Rs 184 lakhs each and a final instalment of Rs 160 lakhs, after moratorium of 12months from the date of loan. The loan is secured by certain land and buildings and fixed deposit of Rs 402lakhs.

(b) Current maturities disclosed under the head current liabilities [ Refer Note 8 ]

Non-current Current


Provision for employee benefits

Provision for gratuity [Refer Note 28] 271.99 278.91 706.38 792.68

Provision for leave benefits - - 479.71 201.87

271.99 278.91 1,186.09 994.55

6 PROVISIONS

59

7 SHORT-TERM BORROWINGS

Loans repayable on demand from banksIndian rupee packing credit loan (secured) 28,290.69 20,359.64Foreign currency packing credit loan (secured) - 3,242.26Bank overdraft (unsecured) 3,014.22 2,602.19

31,304.91 26,204.09

Note :

(a) Packing Credit is secured against hypothecation of inventory,trade receivables and three immovable properties. The interest is 10.15%(2015: 10.7%) p.a for Indian Rupee loan and LIBOR+350 (2015:LIBOR+350) basis points for foreign currency packing credit loan.

8 TRADE PAYABLES AND OTHER CURRENT LIABILITIESTrade payables

total outstanding dues of micro enterprises andsmall enterprises [refer note 35] 41.02 27.59total outstanding dues of creditors other thanmicro enterprises and small enterprises 10,370.55 10,071.80

10,411.57 10,099.39Other current liabilities

Current maturities of long-term borrowings [Refer Note 5] 3,041.96 2,208.00Advances from customers / others 254.04 1,765.26Due to subsidiaries 4,281.39 4,038.07Book overdraft 1.82 73.14Interest accrued and not due on borrowings 169.79 214.97Unclaimed dividends - 0.15Statutory liabilities 256.42 258.70

8,005.42 8,558.29

18,416.99 18,657.68


March 31, 2016 March 31, 2015




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61

10 NON-CURRENT INVESTMENTS

Trade investments [valued at cost unless stated otherwise]Investment In subsidiaries (unquoted equity instruments)

All Colour Garments Private Limited 333.98 333.9820,000 (2015 : 20,000) equity shares of Rs. 10 each, fully paid-up

Deejay Trading Private Limited 81.96 81.9620,000 (2015 : 20,000) equity shares of Rs. 10 each, fully paid-up

Glamourwear Apparels Private Limited 101.46 101.4620,000 (2015 : 20,000) equity shares of Rs. 10 each, fully paid-up

Madhin Trading Private Limited 65.86 65.8620,000 (2015 : 20,000) equity shares of Rs. 10 each, fully paid-up

Magenta Trading Private Limited 69.08 69.0820,000 (2015 : 20,000) equity shares of Rs. 10 each, fully paid-up

Rafter Trading Private Limited 36.72 36.7220,000 (2015 : 20,000) equity shares of Rs. 10 each, fully paid-up

Rajdin Apparels Private Limited 170.90 170.9020,000 (2015 : 20,000) equity shares of Rs. 10 each, fully paid-up

Reflexion Trading Private Limited 1.00 1.0010,000 (2015 : 10,000) equity shares of Rs. 10 each, fully paid-up

Rishikesh Apparels Private Limited 67.83 67.8320,000 (2015 : 20,000) equity shares of Rs. 10 each, fully paid-up

Robot Systems Private Limited - 327.81Nil (2015 : 12,000) equity shares of Rs. 100 each, fully paid-up

Seven Hills Clothing Private Limited 307.90 307.9020,000 (2015 : 20,000) equity shares of Rs. 10 each, fully paid-up

Vignesh Apparels Private Limited 80.89 80.8920,000 (2015 : 20,000) equity shares of Rs. 10 each, fully paid-up

SNS Clothing Private Limited 1,776.00 1,776.0020,000 (2015 : 20,000) equity shares of Rs. 10 each, fully paid-upLess : Provision for diminution in value of Investment (203.39) (203.39)

1,572.61 1,572.61

(A) 2,890.19 3,218.00Non trade investments [valued at cost unless stated otherwise]Investment in government securities (unquoted) - National Savings Certificate 0.43 0.43

(B) 0.43 0.43

(A) + (B) 2,890.62 3,218.43Note :(a) Aggregate amount of unquoted investments 2,890.62 3,218.43(b) Aggregate provision for dimunition in value of investment 203.39 203.39


March 31, 2016 March 31, 2015


11 DEFERRED TAX ASSET (NET)Deferred tax asset

Impact of difference between tax depreciation and depreciation 761.39 -for financial reporting

Impact of expenditure charged to the statement of profit and lossin the current year but allowed for tax purposes in subsequentyears on payment basis 198.03 -

Net deferred tax asset 959.42 -



(A) Unsecured, Considered Good Non-current Current


Capital advances 103.52 14.70 - -Security and other deposits 2,670.93 1,707.92 - -Advance to wholly owned subsidiaries - - 61.59 3.20Advances to suppliers - - 1,000.11 921.71Other loans and advances

Prepaid expenses 5.99 6.89 288.89 302.06Loans and advances to employees 26.92 48.23 12.03 33.26Other receivables - - - 18.40Advance tax 544.49 361.50 - -Balance with statutory /government authorities - - 215.89 142.33

3,351.85 2,139.24 1,578.51 1,420.96

12 LOANS AND ADVANCES(All amounts in Indian Rupees in lakhs, except stated otherwise)

(B) Advances / deposits considered Non-current Current

doubtful 31 March 2016 31 March 2015 31 March 2016 31 March 2015

Security and other deposits 31.16 31.16 - -Other receivables 239.95 221.55 - -

271.11 252.71 - -Less: Provision for doubtful advances / deposits (271.11) (252.71) - -

- - - -

Total (A+B) 3,351.85 2,139.24 1,578.51 1,420.96

Current

31 March 2016 31 March 2015

Advance to wholly owned subsidiaries for supplies / services.Reflexion Trading Private Limited 34.25 -Deejay Trading Private Limited 27.24 -Robot Systems Private Limited - 3.20

61.59 3.20

Non-current Current


Unsecured, Considered GoodNon-current bank balances [ Refer Note 16 ] 735.78 657.56 - -Interest accrued on bank deposits - - 930.88 121.57Mark to market gain on derivative contracts - - 530.10 1,102.45Export incentives receivable - - 3,602.92 3,010.94Other receivables - - 192.77 4,413.75

735.78 657.56 5,256.67 8,648.71

13 OTHER ASSETS

63

14 INVENTORIES(Valued at lower of cost and net realisable value)Raw materials (including packing materials) 5,631.11 7,393.79[includes material in transit Rs. 355lakhs (2015 : 273.25 lakhs)]Work-in-progress 7,823.71 8,759.61Finished goods 5,624.09 4,396.63Consumables, stores and spares parts 305.20 314.62

19,384.11 20,864.65


March 31, 2016 March 31, 2015


31 March 2016 31 March 2015

Outstanding for a period exceeding six months from the datethey are due for payment

Unsecured, considered good 312.33 476.64Unsecured, considered doubtful 1,137.16 1,503.95

1,449.49 1,980.59Less: Provision for doubtful receivables 1,137.16 1,503.95

312.33 476.64Other receivables

Unsecured, considered good 7,672.31 7,256.30

7,984.64 7,732.94

15 TRADE RECEIVABLES

Non-current Current31 March 2016 31 March 2015 31 March 2016 31 March 2015

Cash and cash equivalentsCash on hand - - 109.45 18.26Balance with banks :-- in current accounts - - 5,352.14 4,881.62-- in EEFC accounts - - 1.95 1.53-- in unpaid dividend accounts - - - 0.15

Deposits with original maturity for - - - 10.12less than 3 months

- - 5,463.54 4,911.68Other bank balances

Deposits with original maturity for more 735.78 657.56 - 66.54than 12 months*Deposits with original maturity for more - - 15,454.00 2,062.76than 3 months and less than 12 months

735.78 657.56 15,454.00 2,129.30Amount disclosed under non-current (735.78) (657.56) - -assets (note 13)

- - 20,917.54 7,040.98

16 CASH AND BANK BALANCES

* Includes Rs. 402 lakhs (2015 - Rs. 402 lakhs) held by the bank as security against the term loan.


17 REVENUE FROM OPERATIONS

Sale of Finished goodsExports 91,308.52 81,933.78Domestic 13,370.46 18,449.55

104,678.98 100,383.33Other operating revenue

Sale of accessories, fabrics, etc 928.18 845.72Job work income 77.35 80.15Export incentives 6,122.62 5,223.81Scrap sales and others (including claims) 488.96 478.76

7,617.11 6,628.44

Revenue from operations (gross) 112,296.09 107,011.77

Details of finished goods soldManufactured (Readymade garments) 104,678.98 100,383.33

18 OTHER INCOME

Interest income onBank deposit 989.05 220.79Others 207.74 -

Exchange differences (net) 787.98 3,147.47Profit on sale of fixed assets (net) 9.97 44.67Excess provision of earlier years, written back 114.54 1,179.53Other non-operating income / claims 716.82 25.40

2,826.10 4,617.86

19 COST OF RAW MATERIALS CONSUMED

Inventory at the beginning of the year 7,393.79 8,521.17Add: purchases 58,069.60 55,260.62

65,463.39 63,781.79Less: inventory at the end of the year 5,631.11 7,393.79

Cost of raw materials consumed 59,832.28 56,388.00

Note :(a) Details of inventory held

Fabrics 3,643.83 5,441.92Accessories and others 1,987.28 1,951.87

5,631.11 7,393.79(b) Details of raw materials consumed

Fabrics 46,132.92 41,884.20Accessories 13,076.75 14,274.88Others 622.61 228.92

59,832.28 56,388.00(c) Imported and indigenous raw materials consumed

Imported 23,157.76 21,138.09Indigenous 36,674.52 35,249.91

59,832.28 56,388.00% of total consumptionImported 39% 37%Indigenous 61% 63%

100% 100%


March 31, 2016 March 31, 2015


65

20 (INCREASE) / DECREASE IN INVENTORIES OFFINISHED GOODS AND WORK-IN-PROGRESS

Inventories at the beginning of the yearWork-in-progress 8,759.61 7,168.32Finished goods (Readymade garments) 4,396.63 4,221.11

13,156.24 11,389.43Inventories at the end of the year

Work-in-progress 7,823.71 8,759.61Finished goods (Readymade garments) 5,624.09 4,396.63

13,447.80 13,156.24

(291.56) (1,766.81)

21 EMPLOYEE BENEFITS EXPENSE

Salaries, wages and bonus 10,766.23 10,969.81Contribution to provident fund and other fund 992.08 919.86Gratuity expense 154.34 454.24Staff welfare expenses 270.70 329.41

12,183.35 12,673.32

22 OTHER EXPENSES

Consumption of consumables, stores and spares 1,162.02 1,133.20Power and fuel 1,387.54 1,429.71Job work charges 25,131.98 27,055.92Other manufacturing expenses 559.74 619.84Rent 2,123.20 885.58Rates and taxes 223.64 138.62Insurance 348.51 318.36Repairs and maintenance - Plant and machinery 524.15 592.32 - Buildings 44.51 51.52 - Others 512.06 467.51Legal and professional charges 370.52 304.70Printing and stationery 113.50 140.72Communication costs 152.78 203.95Travelling and conveyance 320.82 354.04Auditors' remuneration 78.06 54.49Director's remuneration 184.07 174.55Clearing, forwarding and freight (net of recoveries) 983.14 1,087.89Provision for doubtful deposits and advances 18.40 -Capital work in progress written off 136.23 -Irrecoverable balances written off 208.23 208.41Provision for doubtful debts 489.61 587.96Bad debts written off 273.26 338.08Export claims 408.35 603.25Miscellaneous expenses 1,059.56 829.05

36,813.88 37,579.67


March 31, 2016 March 31, 2015



Note :

(a) Consumables, stores and spares consumed

Imported 80.70 11.18

Indigenous 1,081.32 1,122.02

1,162.02 1,133.20

% of total consumption

Imported 7% 1%

Indigenous 93% 99%

100% 100%

(b) Payment to auditor

Audit fees 39.32 27.50

Limited review fees 30.52 19.50

In other capacity - Taxation matters 1.72 1.50

Out of pocket expenses (includes service tax) 6.50 5.99

78.06 54.49

23 DEPRECIATION AND AMORTISATION EXPENSE

Depreciation on tangible assets 2,015.31 2,948.82

Amortisation on intangible assets 31.03 43.09

2,046.34 2,991.91

24 FINANCE COSTS

Interest

- on term loans 572.55 887.59

- on packing credit 1,795.09 2,304.09

- on bill discounting and others 868.23 742.34

Exchange difference to the extent considered as 131.30 31.77

an adjustment to borrowing cost

Bank charges 579.15 717.48

3,946.32 4,683.27

25 EXCEPTIONAL ITEMS

Profit on sale of land, building and other fixed assets 2,574.62 4,355.31

Profit on sale of investment in subsidiary 717.19 -

Compensation for surrender of tenancy 1,250.00 -

4,541.81 4,355.31


March 31, 2016 March 31, 2015


67


26 Contingent liabilities (to the extent not provided for)

March 31, 2016 March 31, 2015

(a) Claims against the Company not acknowledged as debts 333.36 336.49

(b) Guarantees given by banks 645.00 -(c) Outstanding letters of credit 2,519.84 4,574.76

(d) Bills of exchange discounted with banks 13,912.04 10,711.33

(e) The Company is also involved in certain litigations with third parties, the impact of which is notquantifiable. These cases are pending with various courts / forums and are scheduled for hearings.After considering the circumstances and legal evaluation thereon, the Company’s management be-lieves that these cases will not have any adverse impact on the financial statements.

March 31, 2016 March 31, 2015

27 Capital and other commitments(a) Estimated amount of contracts remaining to be executed on

capital accounts and not provided for (net of advances) 123.57 259.43(b) The Company has imported capital goods without payment of duty under

Export promotion capital goods ('EPCG') scheme. Value of pendingexport obligation to be fulfilled before June 21, 2021 344.20 144.91

(c) For commitments relating to leasing arrangements, refer Note 31(d) For commitments relating to forward contracts, refer Note 36

28 Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more ofservice gets a gratuity on retirement or termination at 15 days salary (last drawn salary) for each completedyear of service. The scheme is funded with an insurance Company in the form of a qualifying insurance policy.

The following tables summaries the components of net benefit expense recognised in the statement ofprofit and loss and the funded status and amounts recognised in the balance sheet:

Net employee benefit expense (in statement of profit and loss) :

March 31, 2016 March 31, 2015

Current service cost 109.03 108.32

Interest cost on benefit obligation 69.83 66.12Expected Return on Plan Assets (1.66) (1.63)

Actuarial loss / (gain) (22.86) 281.43

Net benefit expense 154.34 454.24

Actual return on plan asset 1.73 1.30

Details of Provision for gratuity (in Balance Sheet)

Defined benefit obligation 1,000.79 1,094.88

Fair value of plan asset (22.42) (23.29)

Plan liability / (asset) 978.37 1,071.59

Changes in the present value of defined benefit obligation

Opening defined benefit obligation 1,094.88 810.79

Current Service Cost 109.03 108.32

Interest Cost 69.83 66.12

Benefits Paid (250.16) (171.45)Actuarial (gain) / loss (22.79) 281.10

Closing defined benefit obligation 1,000.79 1,094.88



March 31, 2016 March 31, 2015Changes in the fair value of plan asset are as follows

Opening fair value of plan asset 23.29 25.32Expected return 1.66 1.63Actuarial gain / (loss) 0.07 (0.33)Contributions by employer 247.56 168.12Benefits Paid (250.16) (171.45)

Closing fair value of plan asset 22.42 23.29

The principal assumptions used in determining gratuity obligationsfor the Company’s plan are shown below:

Interest Rate 7.21% 7.95%Discount Factor 7.21% 7.95%Estimated Rate of return on Plan Assets 8.00% 8.00%Attrition Rate 40.00% 40.00%Rate of escalation in Salary per annum 10.00% 12.00%Retirement Age 60 years 60 years

The major categories of plan asset as a percentage of thefair value of total plan asset are as follows:

Investments with insurer 100% 100%

Notes:1. The estimate of future salary increases considered in actuarial valuation takes into account inflation,

seniority, promotion and other relevant factors such as supply & demand in the employment market.2. The estimated rate of return on plan assets is determined based on the market prices prevailing on

that date, applicable to the period over which the obligation is to be settled.3. The Company expects to contribute Rs.706.38 lakhs to gratuity fund in 2016-17.

Amounts for the current year and previous four year period are as follows:

31 March 31 March 31 March 31 March 31 March2016 2015 2014 2013 2012

Defined benefit obligation 1,000.79 1,094.88 810.79 588.73 604.18Plan assets (22.42) (23.29) (25.32) (31.05) (79.45)(Surplus) / deficit 978.37 1,071.59 785.47 557.68 524.73Experience adjustment onplan liabilities (22.79) 281.10 104.27 19.90 36.32Experience adjustment onplan assets 0.07 0.33 0.61 (0.30) 0.67


29 Segment informationa) Primary business segment

The Company is engaged in a single business segment of sale of garment, and hence, no additionaldisclosures are required, other than those already given in the financial statements.

b) Secondary business segment (by geographical area based on location of customers):The Company mainly operates in two geographical areas of the world, i.e., India and Rest of World, thedetails of which are as below:

Geographical Segment Revenues / Carrying amountIncome of segment

assets

In India 20,537.52 66,885.39 (24,830.59) (60,037.56)

Outside India 91,732.90 5,577.69 (82,181.18) (4,417.29)

Total 112,270.42 72,463.08 (107,011.77) (64,454.85)

All fixed assets are located in India.Notes: Figures in brackets relate to previous year.


69

30 Related party disclosures

A. Names of related parties and description of relationship:

Description of Relationship Names of related parties

a. Parties where control exists:

Immediate Holding Company Blackstone FP Capital Partners (Mauritius) V-B

Subsidiary Limited

Ultimate holding Company Blackstone FP Capital Partners (Mauritius)

V-B Limited

Wholly owned subsidiaries All Colour Garments Private Limited

Deejay Trading Private Limited

Glamourwear Apparels Private Limited

Madhin Trading Private Limited

Magenta Trading Private Limited

Rafter Trading Private Limited

Rajdin Apparels Private Limited

Reflexion Trading Private Limited

Rishikesh Apparels Private Limited

Seven Hills Clothing Private Limited

SNS Clothing Private Limited

Vignesh Apparels Private Limited

b. Key management personnel:

Director and Chief Executive Officer Gautam Chakravarti (resigned effective May 25, 2015)

Vice Chairman & Managing Director Padala Ramababu (appointed effective May 25, 2015)

Chief Financial Officer (CFO) Sumit Keshan (resigned effective Nov 15, 2015)

Chief Financial Officer (CFO) Sathyamurthy A

(appointed effective Nov 16, 2015)

Company Secretary Ramya Kannan




B. The following are the volume of transactions with related parties during the year and outstanding balancesas at the year-end disclosed in aggregate by type of related party:

Nature of Subsidiary Key Management TotalTransactions Companies Personnel

Sales / Other IncomeSale of fabrics, accessories / 268.94 - 268.94readymade garments (633.59) - (633.59)

Expenses

Job work charges 24,105.94 - 24,105.94 (26,281.44) - (26,281.44)

Material purchases 407.89 - 407.89 (674.41) - (674.41)

Remuneration - 244.81 244.81 - (251.88) (251.88)

Balances outstanding as at March 31, 2016

Trade payables and other 4,281.39 25.34 4,306.74current liabilities (4,038.07) (53.37) (4,091.44)

Trade advances 61.59 - 61.59

(3.20) - (3.20)

Note : (i) Figures in brackets relate to previous year.

Disclosure for transactions that exceed 10% of total value of each class of transactions:

31 March 31 MarchSale of fabrics, accessories / readymade garments 2016 2015

Subsidiary companies

SNS Clothing Private Limited 268.94 503.65

Reflexion Trading private Limited - 129.94

268.94 633.59

Job work Charges

Subsidiary Companies

Seven Hills Clothing Private Limited 7,121.93 7,280.60Rafter Trading Private Limited 2,152.58 3,066.96

Rishikesh Apparels Private Limited 2,842.95 3,029.98

Rajdin Apparels Private Limited 2,652.97 2,668.83

Magenta Trading Private Limited 2,842.17 2,684.75Others 6,493.34 7,550.32

24,105.94 26,281.44



71


31 March 2016 31 March 2015Material purchasesSubsidiary Companies

Reflexion Trading Private Limited 407.89 674.41Remuneration to Key Management Personnel

Gautam Chakravarti 14.08 149.25

Padala Ramababu 112.69 -

Sumit Keshan 87.35 102.63Sathyamurthy A 22.49 -

Ramya Kannan 8.20 -

244.81 251.88Current LiabilitiesSubsidiary Companies

SNS Clothing Private Limited 1,258.23 1,247.92

Seven Hills Clothing Private Limited 1,207.66 1,041.19

All Colour Garments Private Limited 292.87 275.50Others 1,522.64 1,473.46

4,281.40 4,038.07Remuneration payable to Key Management Personnel

Gautam Chakravarti - 42.91Padala Ramababu 21.53 -

Sumit Keshan - 10.46

Sathyamurthy A 3.24 -Ramya Kannan 0.58 -

25.35 53.37Loans and AdvancesSubsidiary Companies

Deejay Trading Private Limited 27.34 -

Reflexion Trading Private Limited 34.25 -

Robot Systems Private Limited - 3.20

61.59 3.20


31 Leasing arrangements

The Company’s leasing arrangements in respect of its office, factory and residential premises are in the nature ofoperating leases. These leasing arrangements, which are usually cancellable at the option of the lessee, are for atotal period ranging from eleven months to sixty six months and are renewable with mutual consent. All leasesinclude a clause to enable upward revision of the rental charge on a periodic basis as specified under the rentalagreement. The charge on account of lease rentals for the year is Rs. 2,123.20 lakhs (2015: Rs. 885.58 lakhs).

Future obligations of lease rentals for non cancellable period under respective lease agreements are as follows.31 March 2016 31 March 2015

Not later than one year 1,483.36 195.44Later than one year and not later than five years 3,760.82 -Later than five years - -


35 Disclosure of dues / payments to micro and small enterprises to the extent such enterprises areidentified by the company:

31 March 31 March2016 2015

(i) The principal amount due thereon remaining unpaid 40.18 22.20on March 31, 2016Interest amount due and remaining unpaid on March 31, 2016 - -

(ii) The amount of interest paid by the buyer in terms of section 16of the Micro, Small and Medium Enterprises Development Act, 2006,along with the amount of the payment made to the supplier beyondthe appointed day during each accounting year. 5.39 2.26

(iii) The amount of interest due and payable for the period of delayin making payment (which have been paid but beyond the appointedday during the year) but without adding the interest specified underthe Micro, Small and Medium Enterprises Development Act, 2006 - -

(iv) The amount of interest accrued and remaining unpaid on March 31,2016 in respect of principal amount settled during the year. 0.84 5.39

(v) The amount of further interest remaining due and payable evenin the succeeding years, until such date when the interest duesas above are actually paid to the small enterprise, for the purposeof disallowance as a deductible expenditure under section 23 ofthe Micro, Small and Medium Enterprises Development Act, 2006. 0.84 5.39

(All amounts in Indian Rupees in lakhs, except stated otherwise)32 CIF value of imports

31 March 31 March2016 2015

Capital goods 131.05 178.59Raw materials and accessories 24,497.96 20,715.47Stores and spares 80.07 11.31

24,709.08 20,905.37

33 Expenditure in foreign currency

31 March 31 March2016 2015

Travel expenses 42.97 48.94Brokerage and commission 5.37 7.57Export claims 408.35 603.25Others 67.51 190.29

524.20 850.05

34 Earnings in foreign currency

31 March 31 March2016 2015

FOB value of exports 91,308.52 81,933.78Sale of accessories, fabrics, etc 193.09 170.41Freight and insurance recoveries 1,568.60 482.72Export Claims 231.29 76.98

93,301.50 82,663.89


73


36 Derivative instruments and unhedged foreign currency exposurea) Particulars of Derivative contracts: Forward contract outstanding as at balance sheet date

Sellcontracts

31 March 2016 31 March 2015

foreigncurrency(in lakhs)

Purpose

Rs.(in lakhs)


Rs.(in lakhs)

USD 331.29 22,788.84 540.06 33,834.84Hedge of expected future salesEURO - - 37.29 2,521.72

37 Exchange difference

31 March 31 March2016 2015

Exchange difference loss / (gain) onPre-shipment packing credit 53.55 -Post-shipment credit (262.62) 105.68Forward contracts and options (689.32) (3,262.49)Foreign currency receivables (38.44) (83.60)Foreign currency payables 148.85 92.94

(787.98) (3,147.47)

b) As of the Balance Sheet date, the Company’s unhedged foreign currency exposure is as under

Receivables / (Payables)

31 March 2016 31 March 2015

Amount in Amount Amount in Amountforeign Rs. in lakhs foreign Rs. in lakhs

currency currency

Bank balances – USD 2,943 1.95 2,435 1.53Trade receivables – USD* 6,795,231 4,507.62 4,982,429 3,120.49Trade receivables – EUR* 859 0.64 1,373,254 928.65Trade receivables – GBP* 979,301 931.81 108,645 100.58Loans and advances –USD 587,518 389.73 410,050 256.94Loans and advances – EUR 2,681 2.01 15,751 10.63Loans and advances – GBP 900 0.86 - -Short-term borrowings – USD - - (5,174,366) (3,242.26)Trade payables – USD (2,763,955) (1,833.75) (2,685,649) (1,682.83)Trade payables – EUR (18,092) (13.58) (21,404) (14.48)Trade payables – GBP (7,164) (6.82) (8,086) (7.49)

Advances received from customers – USD - - (65,684) (44.42)

* net of export bills discounted





38 Employee stock option Plans (Equity Settled)

In September 2010, the shareholders of the Company approved Stock Option Plan (ESOP 2010) in accordancewith the guidelines issued by the Securities and Exchange Board of India (SEBI) for Employees Stock OptionsPlan. The plan covered all employees of the Company including employees of subsidiaries and directors andprovided for the issue of 1,718,800 shares of Rs. 5 each. The Company follows intrinsic method of accountingfor stock compensation cost pursuant to the Guidance Note on "Accounting for Employee Share - Based Payments"issued by the "Institute of Chartered Accountants of India".

Nil (2015: 85,000) options have been granted during the year and 408,339 (2015: 1,136,668) are outstandingas at March 31, 2016. The vesting period ranges from 1 to 7 years. Weighted average of remaining contractuallife is 7.37 years (2015: 8.35 years). The weighted average exercise price of all the options is Rs. 42.34 (2015: Rs.40.89). There is no compensation cost since the exercise price is equal to the intrinsic value as at the date ofgrant.

The weighted average fair value of options granted during the year was Rs. Nil (2015: Rs.55.86). The Black Scholesvaluation model has been used for computing the weighted average fair value considering the following inputs:

31 March 2016 31 March 2015

Dividend yield % * -

Expected volatility % * 45.50%

Risk free interest rate * 7.95%

Weighted average share price * 40.89

Exercise price * 80.20

Expected life of options granted in years * 10

* Not applicable since no ESOP’s were granted during the year.

The expected life of the stock is based on historical data and current expectations and is not necessarily indicativeof exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatilityover a period similar to the life of the options is indicative of future trends, which may also not necessarily be theactual outcome.

39 During the year ended March 31, 2016, the Company has recognised deferred tax asset to the extent that thereis virtual certainty supported by convincing evidence based on the future profitability and projections of theCompany, backed by confirmed customer orders on hand as at the year end. The Management believes thatthere is sufficient assurance that future taxable income will be available against which the deferred tax assets canbe realized.

40 The Company is in process of taking necessary steps to comply with the Transfer Pricing requirementsrelating to the preparation & maintenance of the Transfer Pricing documentation with respect to the specifieddomestic transactions entered into by the Company during financial year ended March 31, 2016. TheManagement is of the opinion that the specified domestic transactions are at arm’s length and hence theaforesaid legislation will not have any impact on the standalone financial statements, particularly on theamount of tax expense and that of provision for taxation.

75

41 The Company had filed petition with the Company Law Board for compounding of offence u/s. 297 of the

erstwhile Companies Act, 1956 for the transactions entered with CMS Info Systems Private Limited between

July 2009 to October 2011 and as at date, the petition is pending with the Company Law Board.

For periods subsequent to October 2011, the Company had filed an application with Central Government,

Ministry of Corporate Affairs, seeking its approval u/s. 297(1) of the erstwhile Companies Act, 1956 for

entering into contract with CMS Info Systems Private Limited which is pending approval.

42 Previous year comparatives

Previous year figures have been regrouped/re-arranged/reclassified, wherever necessary to confirm to the

current year’s presentation.

As per our report of even date For and on behalf of theBoard of DirectorsGokaldas Exports Limited








To the members of Gokaldas Exports Limited

Report on the Consolidated Financial Statements

We, Girish Murthy & Kumar and S.R. Batliboi & Associates LLP, have audited the accompanying consolidatedfinancial statements of Gokaldas Exports Limited (hereinafter referred to as “the Holding Company”) and itssubsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), comprising ofthe Consolidated Balance Sheet as at March 31, 2016, the Consolidated Statement of Profit and Loss andConsolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policiesand other explanatory information (hereinafter referred to as ‘the consolidated financial statements’).

Management’s Responsibility for the Consolidated Financial Statements

The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financialstatements in terms with the requirement of the Companies Act, 2013 (“the Act”) that give a true and fairview of the consolidated financial position,consolidated financial performance and consolidated cash flowsof the Group in accordance with accounting principles generally accepted in India, including the AccountingStandards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014. The respective Board of Directors of the companies included in the Group are responsible formaintenance of adequate accounting records in accordance with the provisions of the Act for safeguardingof the assets and for preventing and detecting frauds and other irregularities; the selection and applicationof appropriate accounting policies; making judgements and estimates that are reasonable and prudent; andthe design, implementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparationand presentation of the financial statements that give a true and fair view and are free from materialmisstatement, whether due to fraud or error, which have been used for the purpose of preparation of theconsolidated financial statements by the Directors of the Holding Company, as aforesaid.


Our responsibility is to express an opinion on these consolidated financial statements based on our audit.While conducting the audit, we have taken into account the provisions of the Act, the accounting andauditing standards and matters which are required to be included in the audit report under the provisions ofthe Act and the Rules made thereunder. We conducted our audit in accordance with the Standards onAuditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) ofthe Act. Those Standards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in theconsolidated financial statements.The procedures selected depend on the auditor’s judgement, includingthe assessment of the risks of material misstatement of the consolidated financial statements, whether dueto fraud or error. In making those risk assessments, the auditor considers internal financial control relevantto the Holding Company’s preparation of the consolidated financial statements that give a true and fair viewin order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of the accounting estimates madeby the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidatedfinancial statements. We believe that the audit evidence obtained by us and the audit evidence obtained bythe other auditors in terms of their reports referred to in paragraph (b) of the Other Matters below, issufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, theconsolidated financial statements give the information required by the Act in the manner so required andgive a true and fair view in conformity with the accounting principles generally accepted in India of theconsolidated state of affairs of the Group as at March 31, 2016, their consolidated profit, and their consolidatedcash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

As required by section 143 (3) of the Act, we report, to the extent applicable, that:

(a) We / the other auditors whose reports we have relied upon have sought and obtained all the informationand explanations which to the best of our knowledge and belief were necessary for the purpose of ouraudit of the aforesaid consolidated financial statements;

(b) In our opinion proper books of account as required by law relating to preparation of the aforesaid

77

consolidation of the financial statements have been kept so far as it appears from our examination ofthose books and reports of the other auditors;

(c) The consolidated Balance Sheet, consolidated Statement of Profit and Loss, and consolidated Cash FlowStatement dealt with by this Report are inagreement with the books of account maintained for thepurpose of preparation of the consolidated financial statements;

(d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standardsspecified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of the written representations received from the directors of the Holding Company as onMarch 31, 2016 taken on record by the Board of Directors of the Holding Company and the reports ofthe auditors who are appointed under Section 139 of the Act, of its subsidiary companies incorporatedin India, none of the directors of the Group’s companies incorporated in India is disqualified as on 31stMarch, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy and the operating effectiveness of the internal financial controls overfinancial reporting of the Holding Company and its subsidiary companies incorporated in India, refer toour separate report in “Annexure 1” to this report;

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information andaccording to the explanations given to us:

i. The consolidated financial statements disclose the impact of pending litigations on itsconsolidated financial position of the Group– Refer Note 27 to the consolidated financialstatements;

ii. The Group did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education andProtection Fund by the Holding Company and its subsidiaries incorporated in India.

Other Matters

(a) The accompanying consolidated financial statements include (after elimination) total assets of Rs1,734.01 lakhs as at March 31, 2016, and total revenues (including other income) of Rs 815.76 lakhsand net cash outflows of Rs 2.63 lakhs for the year ended on that date, in respect of four subsidiaries,which have been audited by Girish Murthy & Kumar on which S.R. Batliboi & Associates LLP has placedreliance for the purpose of this report.

(b) The accompanying consolidated financial statements include (after elimination) total assets of Rs2,383.87 lakhs as at March 31, 2016, and total revenues (including other income) of Rs 1,870.12 lakhsand net cash outflows of Rs 153.60 lakhs for the year ended on that date, in respect of eight subsidiaries,which have been audited by other auditors, which financial statements, other financial information andauditor’s reports have been furnished to us by the management. Our opinion on the consolidatedfinancial statements, in so far as it relates to the amounts and disclosures included in respect of thesesubsidiaries and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates tothe aforesaid subsidiaries is based solely on the reports of such other auditors.

Our opinion on the consolidated financial statements, and our report on Other Legal and RegulatoryRequirements above, is not modified in respect of the above matters with respect to our reliance on thework done and the reports of the other auditors and the financial statements and other financial informationcertified by the Management.






Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct, 2013 (“the Act”)

We, Girish Murthy & Kumar and S. R. Batliboi & Associates LLP, have audited the internal financial controls overfinancial reporting of Gokaldas Exports Limited (hereinafter referred to as the “Holding Company”) and its subsidiarycompanies, which are companies incorporated in India, as of March 31, 2016 in conjunction with our audit of theconsolidated financial statements of the Group for the year ended as on that date.

Management’s Responsibility for Internal Financial Controls

The respective Board of Directors of the Holding Company and its subsidiary companies, which are companiesincorporated in India, are responsible for establishing and maintaining internal financial controls based on theinternal control over financial reporting criteria established by the Holding Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design,implementation and maintenance of adequate internal financial controls that were operating effectively for ensuringthe orderly and efficient conduct of its business, including adherence to the respective company’s policies, thesafeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of theaccounting records, and the timely preparation of reliable financial information, as required under the Act.


Our responsibility is to express an opinion on the Holding Company’s internal financial controls over financialreporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, both, issued byInstitute of Chartered Accountants of India, and deemed to be prescribed under section 143(10) of the Act, to theextent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financialcontrols system over financial reporting and their operating effectiveness. Our audit of internal financial controlsover financial reporting included obtaining an understanding of internal financial controls over financial reporting,assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectivenessof internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, includingthe assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraudor error.

We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in termsof their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis forour audit opinion on the internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonabledetail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles, and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of the company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition ofthe company's assets that could have a material effect on the financial statements.

ANNEXURE 1 TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIALSTATEMENTS OF GOKALDAS EXPORTS LIMTED


79

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility ofcollusion or improper management override of controls, material misstatements due to error or fraud may occurand not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting tofuture periods are subject to the risk that the internal financial control over financial reporting may becomeinadequate because of changes in conditions, or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion, the Holding Company and its subsidiary companies, which are companies incorporated in India,have, maintained in all material respects, an adequate internal financial controls system over financial reporting andsuch internal financial controls over financial reporting were operating effectively as at March 31, 2016, based onthe internal control over financial reporting criteria established by the Holding Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

Other Matters

Our report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financialcontrols over financial reporting of the Holding Company,insofar as it relates to twelve subsidiary companies,whichare companies incorporated in India, is based on the corresponding reports of the auditors of such subsidiarycompanies incorporated in India.






CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2016

The accompanying notes are integral part of the consolidated financial statements.As per our report of even date For and on behalf of the

Board of DirectorsGokaldas Exports Limited




EQUITY AND LIABILITIESShareholder's fundsShare capital 3 1,739.47 1,729.72Reserves and surplus 4 19,848.12 14,153.93

21,587.59 15,883.65Non- current liabilitiesLong-term borrowings 5 - 2,674.00Long-term provisions 6 271.99 278.91Deferred tax liability (net) 7 - 6.95

271.99 2,959.86Current liabilitiesShort term borrowings 8 31,304.91 26,204.09Trade payables 9


Other current liabilities 9 7,050.07 8,327.47Short term provisions 6 2,737.46 2,271.47

51,769.31 47,062.44 73,628.89 65,905.95

ASSETSNon-current assetsFixed assetsTangible assets 10 9,520.39 13,093.15Intangible assets 10 85.47 385.31Capital work-in-progress 247.64 218.90

9,853.50 13,697.36Non-current investments 11 0.63 0.63Deferred tax asset (net) 7 959.42 -Long-term loans and advances 12 5,718.43 4,471.83Other non-current assets 13 735.78 657.56

17,267.76 18,827.38Current assetsCurrent Investments 14 0.09 0.09Inventories 15 19,918.34 21,320.59Trade receivables 16 8,496.06 8,215.07Cash and bank balances 17 21,116.12 7,395.82Short-term loans and advances 12 1,573.85 1,498.29Other current assets 13 5,256.67 8,648.71

56,361.13 47,078.57 73,628.89 65,905.95




81

CONSOLIDATED STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED MARCH 31, 2016





INCOMERevenue from operations (gross) 18 114,400.40 109,135.09Less: excise duty 108.06 111.94Revenue from operations (net) 114,292.34 109,023.15Other income 19 3,221.12 4,725.79

117,513.46 113,748.94ExpensesCost of raw materials consumed 20 59,699.73 56,105.77(Increase) / decrease in inventories of finished goodsand work-in-progress 21 (353.60) (2,002.51)Employee benefits expense 22 34,578.79 37,045.44Other expenses 23 16,637.72 15,394.69Depreciation and amortisation expense 24 2,217.52 3,320.73Finance costs 25 3,977.22 4,688.03

116,757.38 114,552.15Profit / Loss before exceptional items 756.08 (803.21)Exceptional items 26 4,575.90 4,355.31Profit before tax (A) 5,331.98 3,552.10Tax expense:Current tax 164.75 91.12Tax of earlier years (net) - (14.42)MAT tax charge / (credit) - (0.27)Deferred tax charge / (credit) (966.37) 6.95Total tax expense (B) (801.62) 83.38Net Profit for the year (A-B) 6,133.60 3,468.72

Earnings per equity share[nominal value per share : Rs. 5 (2015 - Rs. 5)]Basic 17.68 10.05Diluted 17.37 9.97Weighted average number of shares used in computingbasic earning per equity share 34,701,118 34,503,738Weighted average number of shares used in computingdiluted earning per equity share 35,314,246 34,803,527




The accompanying notes are integral part of the consolidated financial statements.


CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016

A. CASH FLOW FROM OPERATING ACTIVITIES:Profit before tax 5,331.98 3,552.10AdjustmentsDepreciation and amortization expense 2,217.52 3,320.73Provision for doubtful deposits and advances 18.40 -Irrecoverable balances written off 208.23 211.39Bad debts written off 362.60 342.23Provision for doubtful debts 489.61 587.96Interest expense 3,259.59 3,934.10Capital work in progress written off 136.23 -Unrealised foreign exchange gains (net) (90.02) (12.11)Profit on sale of assets (net) (9.97) (44.67)Profit on sale of investments (net) - -Excess provision of earlier years written back (115.17) (1,222.91)Interest earned (1,205.30) (222.14)Exceptional items (4,575.90) (4,355.31)

Operating profit before working capital changes 6,027.80 6,091.37

(Increase)/decrease in inventories 1,402.25 (938.70)(Increase)/decrease in trade receivables (1,410.00) 1,314.04(Increase)/decrease in other current assets 3,706.89 (251.14)(Increase)/decrease in long-term loans and advances (955.48) 104.88(Increase)/decrease in short-term loans and advances (302.19) 424.35Increase/(decrease) in trade payables 455.39 (714.00)Increase/(decrease) in other current liabilities (765.79) 357.34Increase/(decrease) in long term provisions (6.92) (1,017.75)Increase/(decrease) in short term provisions 465.99 1,400.74

Cash Generated from Operations 8,617.94 6,771.13Direct taxes paid (net of refunds) (367.05) 22.72

Net Cash Flow from operating activities 8,250.89 6,793.85

B. CASH FLOW FROM INVESTING ACTIVITIES:Purchase of fixed assets, including CWIP and capital advances (707.78) (643.59)Proceeds from sale of fixed assets 4,399.94 1,123.09Deposits redeemed (maturity more than 3 months) 15,532.21 1,792.25Deposits made (maturity more than 3 months) (28,955.79) (4,019.89)Proceeds from sale of Investment 1,045.00 -Interest received 395.99 113.41

Net Cash Flow from / (used in) investing activities (8,290.43) (1,634.73)


Particulars March 31, 2016 March 31, 2015

83

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016


Particulars March 31, 2016 March 31, 2015

C. CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from issuance of equity share capital 64.80 70.42Repayment of long-term borrowings (1,840.04) (1,718.00)Proceeds from short-term borrowings 98,776.96 88,569.20Repayment of short-term borrowings (93,282.32) (86,854.98)Unclaimed dividend transferred to Investor education (0.15) (0.45)and protection fundInterest paid (3,304.77) (3,744.83)

Net Cash Flow from used in financing activities 414.48 (3,678.64)D. Net Increase / (Decrease) in Cash & Cash Equivalents

(A + B + C) 374.94 1,480.48E. Cash and cash equivalents at the beginning of the year 5,266.52 3,786.04

F. Cash and cash equivalents at the end of the year 5,641.46 5,266.52Components of Cash and Cash EquivalentsCash on hand 128.41 54.49Balance with banks :-- in deposit account - 10.12-- in current accounts 5,513.05 5,201.76-- in unpaid dividend accounts (restricted use) - 0.15

Total cash and cash equivalents 5,641.46 5,266.52







1. Corporate Information

Gokaldas Exports Limited (‘the Company’ or ‘Gokaldas’) was incorporated on March 1, 2004 by converting theerstwhile partnership firm Gokaldas India under Part IX of the Companies Act, 1956 (‘the Act’). Pursuant to theorder of the Hon’ble High Court of Karnataka dated November 20, 2004, Gokaldas Exports Private Limited andThe Unique Creations (Bangalore) Private Limited had been amalgamated with the Company, with April 1, 2004being the appointed date. The Company currently operates a 100% Export Oriented Unit, a Domestic Tariff AreaUnit and a Special Economic Zone Unit.

The Company is a public company domiciled in India and its shares are listed in India. The Company and itssubsidiaries (hereinafter collectively referred to as “the Group”) is engaged in the business of design, manufactureand sale of a wide range of garments for men, women and children and caters to the needs of several leadinginternational fashion brands and retailers. The principal source of revenue for the Group is from export ofgarments and related products.

2. Basis of preparation and consolidation of financial statements

The accompanying consolidated financial statements include the accounts of Gokaldas and its subsidiaries asfollows:

Name of the Subsidiary % Holding* Country of Incorporation

All Colour Garments Private Limited 100% India

Deejay Trading Private Limited 100% India

Glamourwear Apparels Private Limited 100% IndiaMadhin Trading Private Limited 100% India

Magenta Trading Private Limited 100% India

Rafter Trading Private Limited 100% India

Rajdin Apparels Private Limited 100% IndiaReflexion Trading Private Limited 100% India

Rishikesh Apparels Private Limited 100% India

Seven Hills Clothing Private Limited 100% IndiaSNS Clothing Private Limited 100% India

Vignesh Apparels Private Limited 100% India

* No change in the shareholding during the year.

The consolidated financial statements of the Group have been prepared in accordance with generally acceptedaccounting principles in India (Indian GAAP). The consolidated financial statements have been prepared tocomply in all material respects with the accounting standards notified under section 133 of the Companies Act2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014.The consolidated financialstatements have been prepared under the historical cost convention on an accrual basis except in case of assetsfor which provision for impairment is made and revaluation is carried out and derivative financial instrumentswhich have been measured at fair value.

The accounting policies have been consistently applied by the Group with those used in the previous year.

The consolidated financial statements have been prepared based on a line-by-line consolidation of balancesheet, statement of profit and loss and cash flows of Gokaldas and its subsidiaries. All material inter-companytransactions and balances between the entities included in the consolidated financial statements have beeneliminated. The consolidated financial statements are prepared using uniform accounting policies for liketransactions and other events in similar circumstances.

The excess of the cost to the Company of its investments in subsidiaries over its proportionate share in equityof the investee company as at the date of acquisition is recognised in the consolidated financial statements asGoodwill. In case the cost of investment in subsidiary companies is less than the proportionate share in equityof the investee company as on the date of investment, the difference is treated as capital reserve and shownunder Reserves and Surplus.

2.1 Summary of Significant accounting policies

a) Use of estimates

The preparation of consolidated financial statements in conformity with generally accepted accountingprinciples requires management to make estimates and assumptions that affect the reported amounts of


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016

85

revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the date of the consolidatedfinancial statements and the results of operations during the reporting period. Although these estimates arebased upon management’s best knowledge of current events and actions, uncertainty about theseassumptions and estimates could result in outcomes requiring material adjustment to the carrying amountsof assets and liabilities in future periods.

b) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group andthe revenue can be reliably measured.

Revenue from sale of goods is recognized when significant risks and rewards of ownership of the goods aretransferred to the customer.

Export incentives are recognized on accrual basis in accordance with the applicable schemes formulated,by the Government of India and where there is reasonable assurance that the enterprise will comply withthe conditions attached to them.

Revenues from job work contract are recognized as and when services are rendered.

Dividend income on investments is accounted when the right to receive the dividend is established as atreporting date.

Interest income is recognized on a time proportion basis taking into account the amount outstanding andthe rate applicable. Insurance / other claims are recognized on acceptance basis.

c) Hedge accounting

The Group is exposed to foreign currency fluctuations on foreign currency assets, liabilities and forecastedcash flows denominated in foreign currencies. The Group limits the effects of foreign exchange rate fluctuationsby following established risk management policies including the use of forward cover derivatives. The Groupenters into derivative contract for sale of US dollars, GBP and Euros, where the counterparty is a bank.

The Group has adopted principles of hedge accounting as set out in Accounting Standard (AS) 30,"FinancialInstruments: Recognition and Measurement", to the extent that the adoption does not conflict with existingaccounting standards and other authoritative pronouncements of Company Law and other regulatory requirements.

Based on the recognition and measurement principles of hedge accounting set out in AS 30, the effectiveportion on changes in the fair values of derivative financial instruments designated as cash flow hedges arerecognized directly in reserves/ equity and are reclassified to the statement of profit and loss upon theoccurrence of the hedged transaction. The ineffective portion of the gain or loss on the hedging instrumentis recognised immediately in the statement of profit and loss. Changes in fair value relating to derivatives notdesignated as hedges are recognized in the statement of profit and loss.

Hedge Accounting is discontinued when the hedging instrument expires or is sold, or terminated, or exercisedor no longer qualifies for hedge accounting. Any cumulative gain or loss on the hedging instrument recognisedin hedging reserve is transferred to profit and loss account when forecasted transaction occurs or when ahedged transaction is no longer expected to occur.

d) Fixed assets and depreciation/ amortization (tangible and intangible)

Fixed assets are stated at cost of acquisition/construction less accumulated depreciation and impairmentlosses if any, net of grants received, where applicable and subsequent improvements thereto includingtaxes, duties, freight and other incidental expenses related to acquisition/construction. Any trade discountsand rebates are deducted in arriving at the purchase price.

Depreciation is provided using the written down value method as per the useful lives of the assets estimatedby the management with residual value at 5%, which is equal to the corresponding rates prescribed underschedule II of the Companies Act, 2013.

Estimated useful life (in years)

Buildings 30Plant & Machinery 15Electrical Equipments 10Office Equipments 5Furniture & Fixtures 10Computers 3Vehicles 8Computer software (Intangibles) 2.5




Leasehold improvements are depreciated over the primary lease period or useful life, whichever is lowerwhich ranges between 5 to 10 years.

Intangible assets comprising Know-how (Process improvement costs) are amortized over 36 months.

e) Borrowing Costs

Borrowing costs includes interest, amortisation of ancillary costs incurred in connection with the arrangementof borrowings and exchange differences arising from foreign currency borrowings to the extent they areregarded as an adjustment to the interest cost.

Borrowing costs attributable to acquisition and construction of qualifying assets that necessarily takessubstantial period of time to get ready for its intended use are capitalized as a part of the cost of such asset.All other borrowing costs are expensed in the period they occur.

f) Impairment of tangible and intangible assets

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired.If any such indication exists, the Group estimates the recoverable amount. If the carrying amount of theasset exceeds its recoverable amount, an impairment loss is recognized in the statement of profit and lossto the extent the carrying amount exceeds the recoverable amount. The recoverable amount is the greaterof the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows arediscounted to their present value using a pre-tax discount rate that reflects current market assessments ofthe time value of money and the risks specific to the asset. After impairment, depreciation is provided on therevised carrying amount of the asset over its remaining useful life.

g) Inventories

Raw materials, packing materials, stores, spares, and consumables are valued at lower of cost and netrealizable value. Cost is determined on a weighted average basis. However, materials and other items heldfor use in the production of inventories are not written down below cost if the finished products in whichthey will be incorporated are expected to be sold at or above cost.

Finished goods and work in progress are valued at lower of cost and net realisable value after consideringprovision for obsolescence and other anticipated loss, wherever considered necessary. Finished goods andwork in progress includes cost of conversion and other production overheads. Cost is determined on aweighted average basis. Cost of finished goods includes excise duty.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs ofcompletion and estimated costs necessary to make the sale.

h) Foreign currency transactions

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currencyamount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which arecarried in terms of historical cost denominated in a foreign currency are reported using the exchangerate at the date of the transaction; and non-monetary items which are carried at fair value or othersimilar valuation denominated in a foreign currency are reported using the exchange rates that existedwhen the values were determined.

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting monetary items of theGroup at rates different from those at which they were initially recorded during the year, or reported inprevious financial statements, are recognised as income or as expenses in the year in which they arise.

i) Government Grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that thegrant/subsidy will be received and all attaching conditions will be complied with.

When the grant or subsidy relates to an expense item, it is netted off with the relevant expense. Where thegrant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the relatedasset.

j) Investments

Investments that are readily realizable and intended to be held for not more than a year from the date onwhich such investments are made, are classified as current investments. All other investments are classified



87

as long-term investments. Current investments are carried at lower of cost and fair value determined on anindividual investment basis. Long-term investments are carried at cost. However, provision for diminutionin value is made to recognize a decline other than temporary in the value of the investments. On disposal ofan investment, the difference between its carrying amount and net disposal proceeds is charged / creditedto statement of profit and loss.

k) Retirement and Other Employee Benefits

(i) Defined Contribution Plans:

Contributions to provident fund are made at pre-determined rates and charged to the statement ofprofit and loss for the year when the employee renders the services. The Group has no obligation, otherthan the contribution payable to the provident fund.

(ii) Defined Benefit Plans:

Gratuity liability is accrued in the books based on actuarial valuation on projected unit credit method asat reporting date. Actuarial gains or losses are immediately taken to statement of profit and loss and arenot deferred.

(iii) Compensated absences:

Accumulated leave, which is expected to be utilised within the next twelve months, is treated as short-termemployee benefit. The Group treats accumulated leave expected to be carried forward beyond twelvemonths, as long-term employee benefit for measurement purposes. Such long-term compensated absencesare provided for based on the basis of an actuarial valuation using the projected unit credit method at the yearend. Actuarial gains or losses are immediately taken to statement of profit and loss and are not deferred. TheGroup presents the leave as a current liability in the balance sheet, to the extent it does not have an unconditionalright to defer its settlement for twelve months after the reporting date.

l) Taxation

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected tobe paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred income taxes reflectsthe impact of current year timing differences between taxable income and accounting income for the yearand reversal of timing differences of earlier years

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at thereporting date. Deferred tax assets are recognised only to the extent that there is reasonable certainty thatsufficient future taxable income will be available against which such deferred tax assets can be realised. Insituations where the Group has unabsorbed depreciation or carry forward tax losses, deferred tax asset isrecognised only to the extent that it has timing differences the reversal of which will result in sufficientincome or there is other convincing evidence that sufficient taxable income will be available against whichsuch deferred tax assets can be realised.

At each reporting date, the Group re-assesses unrecognised deferred tax assets. It recognises deferred taxassets to the extent that it has become reasonably certain or virtually certain, as the case may be thatsufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each reporting date. The Group writes-down thecarrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtuallycertain, as the case may be, that sufficient future taxable income will be available against which deferred taxasset can be realised.

Minimum Alternative Tax (‘MAT’) credit is recognised, as an asset only when and to the extent there isconvincing evidence that the Group will pay normal income tax during the specified period. In the year inwhich the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendationscontained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset iscreated by way of a credit to the statement of profit and loss and shown as MAT Credit Entitlement. TheGroup reviews the same at each reporting date and writes down the carrying amount of MAT CreditEntitlement to the extent there is no longer convincing evidence to the effect that Group will pay normalIncome Tax during the specified period.

m) Employee stock compensation cost

Measurement and disclosure of the employee share-based payment plans is done in accordance withSecurities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the GuidanceNote on Accounting for Employee Share - based Payments, issued by the Institute of Chartered Accountantsof India. The Group accounts for stock compensation expense based on the intrinsic value of the optionsgranted, determined on the date of grant. Compensation expense is amortized over the vesting period ofthe option on a straight - line basis. The accounting value of the options outstanding net of the Deferred




Compensation Expense is reflected as Employee Stock Options Outstanding.

n) Accounting for leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leasedterm, are classified as operating leases. Operating lease payments are recognized as an expense in thestatement of profit and loss on a straight-line basis over the lease term.

o) Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probablethat an outflow of resources will be required to settle the obligation, in respect of which a reliable estimatecan be made. Provisions are not discounted to its present value and are determined based on best estimaterequired to settle the obligation at the reporting date. These are reviewed at each reporting date andadjusted to reflect the current best estimates.

p) Segment Reporting Policies

(i) Identification of segments:

The Group’s operating businesses are organized and managed separately according to the nature ofproducts and services provided, with each segment representing a strategic business unit that offersdifferent products and serves different markets. The analysis of geographical segments is based on theareas in which major operating divisions of the Group operate.

(ii) Basis of allocation:

Assets, liabilities, income and expenditure are allocated to each segment according to the relativecontribution of each segment to the total amount. Unallocated items include general corporate items,which are not allocated any segment.

(iii) Segment Policies:

The Group prepares its segment information in conformity with the accounting policies adopted forpreparing and presenting the consolidated financial statements of the Group as a whole.

q) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equityshareholders (after deducting preference dividends and attributable taxes) by the weighted average numberof equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equityshare to the extent that they were entitled to participate in dividends relative to a fully paid equity shareduring the reporting period. The weighted average number of equity shares outstanding during the periodis adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split;and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable toequity shareholders and the weighted average number of shares outstanding during the period are adjustedfor the effects of all dilutive potential equity shares.

r) Contingent Liability

A contingent liability is a possible obligation that arises from past events whose existence will be confirmedby the occurrence or non-occurrence of one or more uncertain future events beyond the control of theGroup or a present obligation that is not recognised because it is not probable that an outflow of resourceswill be required to settle the obligation. A contingent liability also arises in extremely rare cases where thereis a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognisea contingent liability but discloses its existence in the consolidated financial statements.

s) Cash and Cash equivalents

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand andshort-term investments with an original maturity of three months or less.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016(All amounts in Indian Rupees in lakhs, except stated otherwise)

89

3 SHARE CAPITAL

Authorised shares 2,000.00 2,000.0040,000,000 (2015 : 40,000,000) equity shares of Rs. 5 each

Issued, subscribed and fully paid-up34,789,326 (2015 : 34,594,332) equity shares of Rs. 5 each 1,739.47 1,729.72

1,739.47 1,729.72


March 31, 2016 March 31, 2015

(a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period



At the beginning of the year 34,594,332 1,729.72 34,376,000 1,718.80

Add: Issued during the year - ESOP 194,994 9.75 218,332 10.92

Outstanding at the end of the year 34,789,326 1,739.47 34,594,332 1,729.72

(b) Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 5 per share. Each holder of equity isentitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposedby the Board of Directors is subject to the approval of the shareholders in ensuing Annual General Meeting.

In event of liquidation of the Company, the holders of equity shares would be entitled to receive remainingassets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to thenumber of equity shares held by the shareholders.

(c) Shares held by holding/ ultimate holding company and/ or their subsidiaries/ associates

Equity shares of Rs. 5 each fully paid up 31 March 2016 31 March 2015


Holding company :

Blackstone FP Capital Partners (Mauritius) 19,983,742 999.19 19,983,742 999.19

V-B Subsidiary Limited

(d) Details of shareholders holding more than 5% shares in the Company


No. Shareholding % No. Shareholding %

Blackstone FP Capital Partners (Mauritius) 19,983,742 57.44% 19,983,742 57.77%V-B Subsidiary LimitedICICI Bank Limited 27,262 0.08% 3,485,500 10.08%

As per records of the Company, including its register of shareholders/ members and other declaration receivedfrom shareholders regarding beneficial interest, the above shareholding represent both legal and beneficialownership of shares.

(e) Shares reserved for issue under optionsFor details of shares reserved for issue under the employee stock option (ESOP) plan of the Company, pleaserefer note 35.



4 RESERVES AND SURPLUS

Capital reservesCapital reserve (on amalgamation) balance as per financial statements 9,769.12 9,769.12

Securities premium reserveBalance as per last financial statements 13,780.81 13,721.31Addition on ESOPs exercised 55.05 59.50

Balance as at year end 13,835.86 13,780.81

General reserveBalance as per last financial statements 2,192.09 2,192.09

Hedging reserveBalance as per last financial statements 969.06 847.38Changes during the year :

Transferred to statement of profit and loss on occurrence offorecasted hedge transaction (969.06) (847.38)Net changes in the fair value of effective portion ofoutstanding cash flow derivatives 474.60 969.06

474.60 969.06

Surplus / (deficit) in the statement of profit and lossBalance as per last financial statements (12,557.15) (15,883.01)Depreciation adjustment - (142.86)Profit for the year 6,133.60 3,468.72

Net deficit in the statement of profit and loss (6,423.55) (12,557.15)

19,848.12 14,153.93

5 LONG-TERM BORROWINGS


March 31, 2016 March 31, 2015

Non-current Current


Provision for employee benefits

Provision for gratuity (Refer note 29) 271.99 278.91 1,400.77 1,536.85

Provision for leave benefits - - 1,336.69 734.62

271.99 278.91 2,737.46 2,271.47

6 PROVISIONS

Non-current Current Maturities


Term loans (secured) :

Indian rupee loan from bank - 2,674.00 3,041.96 2,208.00

(Working capital loan)

- 2,674.00 3,041.96 2,208.00

(a) Working capital loan from bank carries interest at 14.45% (2015: 14.95%) p.a. The loan is repayable in 35monthly instalments of Rs 184 lakhs each and a final instalment of Rs 160 lakhs, after moratorium of 12months from the date of loan. The loan is secured by certain land and buildings and fixed deposit of Rs 402lakhs.

(b) Current maturities disclosed under the head current liabilities [ Refer Note 9]


91

8 SHORT-TERM BORROWINGS

Loans repayable on demand from banksIndian rupee packing credit loan (secured) 28,290.69 20,359.64Foreign currency packing credit loan (secured) - 3,242.26Bank overdraft (unsecured) 3,014.22 2,602.19

31,304.91 26,204.09

Note :

(a) Packing credit is secured against hypothecation of inventory,trade receivables and three immovable properties. The interestrate is 10.15% (2015: 10.70%) p.a for Indian rupee loan andLIBOR+350 (2015: LIBOR+350) basis points for foreigncurrency packing credit loan.

9 TRADE PAYABLES AND OTHER CURRENT LIABILITIESTrade payables


10,676.87 10,259.41Other current liabilities

Current maturities of long-term borrowings [Refer Note 5] 3,041.96 2,208.00Other expenses / liabilities 2,796.69 2,948.28Advances from customers / others 383.34 1,963.77Book overdraft 11.72 310.58Interest accrued and not due on borrowings 169.79 214.97Unclaimed dividends - 0.15Statutory liabilities 646.57 681.72

7,050.07 8,327.47

17,726.94 18,586.88


March 31, 2016 March 31, 2015

7 DEFERRED TAX ASSET/(LIABILITY)

Deferred tax liability

Impact of difference between tax depreciation and depreciationfor financial reporting - (245.58)

Gross deferred tax liability - (245.58)Deferred tax assetImpact of difference between tax depreciation and depreciationfor financial reporting 761.39 -Impact of expenditure charged to the statement of profit and lossin the current year but allowed for tax purposes in subsequentyears on payment basis 198.03 238.63

Gross deferred tax assets 959.42 238.63

Net deferred tax asset/liability 959.42 (6.95)




Tang

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2 29

,863.6

6 1,

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6 52

4.79

2,52

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960.9

9 47

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694.6

4 31

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7 1,

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54 90

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281.3

2 3.

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.92

1.03

25.4

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422.4

5 -

- 22

.13

22.1

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Disp

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186.9

1 1,

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1 14

4.99

584.8

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6.90

1.84

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8 47

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- 44

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15 1,

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0 6,

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8 1,

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4 29

,560.1

5 1,

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7 54

0.87

2,45

5.93

512.4

3 47

5.42

44,35

8.69

694.6

4 31

4.79

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5 1,

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9 18

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- 31

4.79

- 31

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1695

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4,76

5.09

1,40

9.49

26,85

3.69

1,73

4.18

546.9

3 2,

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6 46

5.54

459.1

0 39

,548.7

9 69

4.64

- 67

2.13

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7.64

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9 43

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- 74

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9 49

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93

11 NON-CURRENT INVESTMENTS

Non trade investments [valued at cost unless stated otherwise]Investment in Government Securities (unquoted) 0.63 0.63

0.63 0.63Note :(a) Aggregate amount of unquoted investments 0.63 0.63


March 31, 2016 March 31, 2015

Non-current Current

(A) Unsecured, Considered Good 31 March 2016 31 March 2015 31 March 2016 31 March 2015

Capital advances 103.52 14.70 - -Security and other deposits 3,901.66 2,924.58 1.00 1.00Advances recoverable in cash / kind - - 1,011.92 935.35Other loans and advances

Prepaid expenses 14.50 14.79 303.26 328.43Loans and advances to employees 26.92 48.23 31.73 60.67Other receivables - - - 18.40

Advance tax 1,671.83 1,469.26 - -Minimum alternate tax credit entitlement - 0.27 - -Balance with statutory government authorities - - 225.94 154.44

5,718.43 4,471.83 1,573.85 1,498.29

12 LOANS AND ADVANCES

(B) Advances/deposits considered Non-current Current

doubtful 31 March 2016 31 March 2015 31 March 2016 31 March 2015

Security and other deposits 31.16 31.16 - -Other receivables 239.95 221.55 - -

271.11 252.71 - -Less: Provision for doubtful advances / deposits (271.11) (252.71) - -

- - - -

Total (A+B) 5,718.43 4,471.83 1,573.85 1,498.29

Non-current Current


Unsecured, Considered GoodNon-current bank balances [ Refer Note 17] 735.78 657.56 - -Interest accrued on bank deposits - - 930.88 121.57Mark to market gain on derivative contracts - - 530.10 1,102.45Export incentives receivable - - 3,602.92 3,010.94Other receivables - - 192.77 4,413.75

735.78 657.56 5,256.67 8,648.71

13 OTHER ASSETS



31 March 2016 31 March 2015

Outstanding for a period exceeding six monthsfrom the date they are due for payment

Unsecured, considered good 312.33 476.64Unsecured, considered doubtful 1,137.16 1,503.95

1,449.49 1,980.59Less: Provision for doubtful receivables 1,137.16 1,503.95

312.33 476.64Other receivablesUnsecured, considered good 8,183.73 7,738.43

8,496.06 8,215.07

16 TRADE RECEIVABLES

14 CURRENT INVESTMENTSUnquoted government securitiesNational Savings Certificate and Indira Vikas Patra 0.09 0.09

0.09 0.09Note :(a) Aggregate amount of unquoted investments 0.09 0.09

15 INVENTORIES(Valued at lower of cost and net realisable value)Raw materials (including packing materials) 5,681.91 7,428.34[includes material in transit Rs.355 lakhs (2015 : 273.25 lakhs)]Work-in-progress 7,823.71 8,759.61Finished goods 6,107.52 4,818.02Consumables, stores and spares parts 305.20 314.62

19,918.34 21,320.59


March 31, 2016 March 31, 2015

Non-current Current31 March 2016 31 March 2015 31 March 2016 31 March 2015

Cash and cash equivalentsCash on hand - - 128.41 54.49Balance with banks :-- in current accounts - - 5,511.10 5,200.23-- in EEFC accounts - - 1.95 1.53-- in unpaid dividend accounts - - - 0.15

Deposits with original maturity for - - - 10.12less than 3 months

- - 5,641.46 5,266.52Other bank balances

Deposits with original maturity for more 735.78 657.56 - 66.54than 12 months*Deposits with original maturity for more - - 15,474.66 2,062.76than 3 months and less than 12 months

735.78 657.56 15,474.66 2,129.30Amount disclosed under (735.78) (657.56) - -non-current assets (note 13)

- - 21,116.12 7,395.82

17 CASH AND BANK BALANCES

* Includes Rs. 402 lakhs (2015 - 402 lakhs) held by the bank as security against the term loan.


95

18 REVENUE FROM OPERATIONS

(A) Sale of Finished goods-- Exports 91,308.52 81,933.78-- Domestic 13,937.07 18,806.69

105,245.59 100,740.47(B) Other operating revenue

Sale of accessories, fabrics, etc 928.18 845.72Job work income 1,615.05 1,976.27Export incentives 6,122.62 5,223.81Scrap sales and others (including claims) 488.96 348.82

9,154.81 8,394.62

Revenue from operations (gross) 114,400.40 109,135.09

19 OTHER INCOME

Interest incomeon bank deposit 989.76 222.14on others 215.54 -

Exchange differences (net) 787.98 3,147.57Profit on sale of fixed assets 9.97 44.67Excess provision of earlier years written back 115.17 1,222.91Other non-operating income 1,102.70 88.50

3,221.12 4,725.79

20 COST OF RAW MATERIALS CONSUMED

Inventory at the beginning of the year 7,428.34 8,525.63Add: purchases 57,953.30 55,008.48

65,381.64 63,534.11Less: inventory at the end of the year 5,681.91 7,428.34

Cost of raw materials consumed 59,699.73 56,105.77

21 (INCREASE) / DECREASE IN INVENTORIES OFFINISHED GOODS AND WORK-IN-PROGRESS

Inventories at the beginning of the yearWork-in-progress 8,759.61 7,168.32Finished goods 4,818.02 4,406.80

13,577.63 11,575.12Inventories at the end of the year

Work-in-progress 7,823.71 8,759.61Finished goods 6,107.52 4,818.02

13,931.23 13,577.63

(353.60) (2,002.51)

22 EMPLOYEE BENEFITS EXPENSE

Salaries, wages and bonus 29,582.22 31,511.46Contribution to provident fund and other fund 3,572.04 3,578.13Gratuity expense 578.71 869.68Staff welfare expenses 845.82 1,086.17

34,578.79 37,045.44


March 31, 2016 March 31, 2015





March 31, 2016 March 31, 2015

23 OTHER EXPENSESConsumption of consumables, stores and spares 1,167.05 1,140.54Power and fuel 2,254.21 2,327.69Job work charges 1,538.53 1,262.74Other manufacturing expenses 695.94 746.85Rent 3,679.52 2,594.46Rates and taxes 245.82 163.05Insurance 350.37 319.02Repairs and maintenance - Plant and machinery 559.21 630.87 - Buildings 91.69 110.96 - Others 546.09 513.78Legal and professional charges 407.15 364.22Printing and stationery 114.02 141.31Communication costs 153.73 205.15Travelling and conveyance 374.07 410.41Auditors' remuneration 84.99 61.15Director's remuneration 184.07 174.55Clearing, forwarding and freight (net of recoveries) 983.14 1,087.89Provision for doubtful deposits and advances 18.40 -Capital work in progress written off 136.23 -Irrecoverable balances written off 208.23 211.39Provision for doubtful debts 489.61 587.96Bad debts written off 362.60 342.23Export claims 408.35 603.25Miscellaneous expenses 1,584.70 1,395.22

16,637.72 15,394.69

24 DEPRECIATION AND AMORTISATION EXPENSEDepreciation on tangible assets 2,186.49 3,277.64Amortisation on intangible assets 31.03 43.09

2,217.52 3,320.73

25 FINANCE COSTSInterest- on term loans 572.55 887.59- on packing credit 1,795.09 2,304.09- on bill discounting and others 891.95 742.42Exchange difference to the extent considered as 131.30 31.77an adjustment to borrowing costBank charges 586.33 722.16

3,977.22 4,688.03

26 EXCEPTIONAL ITEMSProfit on sale of land, building and other fixed assets 2,574.62 4,355.31Profit on sale of investment in subsidiary 751.28 -

Compensation for surrender of tenancy 1,250.00 -

4,575.90 4,355.31

97



27. Contingent liabilities (to the extent not provided for)

31 March 31 March2016 2015

(a) Claims against the Group not acknowledged as debts 469.46 484.60

(b) Guarantees given by banks 645.00 -(c) Outstanding letters of credit 2,519.84 4,574.76

(d) Bills discounted with banks 13,912.04 10,711.33

(e) The Group is also involved in certain litigations with third parties, the impact of which is not quantifiable.These cases are pending with various courts/forums and are scheduled for hearings. After consideringthe circumstances and legal evaluation thereon, the management of the Group believes that thesecases will not have any adverse impact on the financial statements.

28. Capital and other commitments(a) Estimated amount of contracts remaining to be executed on

capital accounts and not provided for (net of advances) 123.57 259.43(b) The Group has imported capital goods without payment of

duty under Export Promotion Capital Goods ('EPCG') scheme.Value of pending export obligation to be fulfilled beforeJune 21, 2021 344.20 144.91

(c) For commitments relating to lease arrangements, refer Note 32(d) For commitments relating to forward contracts, refer Note 33

29. Gratuity

The Group has a defined benefit gratuity plan. Every employee who has completed five years or more ofservice gets a gratuity on retirement or termination at 15 days salary (last drawn salary) for each completedyear of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the statement of profitand loss and the funded status and amounts recognised in the balance sheet:

31 March 31 March2016 2015

Net employee benefit expense (in statement of profit and loss) :Current service cost 396.77 378.13Interest cost on benefit obligation 138.76 136.30Expected Return on Plan Assets (37.62) (41.51)Actuarial loss/(gain) 80.80 396.76

Net benefit expense 578.71 869.68

Actual return on plan asset 41.09 8.99Details of Provision for gratuity (in Balance Sheet)

Defined benefit obligation 2,271.64 2,224.38Fair value of plan asset (598.88) (408.62)Plan liability / (asset) 1,672.76 1,815.76

Changes in the present value of defined benefit obligationOpening defined benefit obligation 2,224.38 1,661.54Current Service Cost 396.77 378.13Interest Cost 138.76 136.30Benefits Paid (572.54) (315.83)Actuarial (gain)/loss 84.27 364.24

Closing defined benefit obligation 2,271.64 2,224.38


(All amounts in Indian Rupees in lakhs, except stated otherwise)Changes in the fair value of plan asset are as follows:

31 March 31 March2016 2015

Opening fair value of plan asset 408.62 140.68Expected return 37.62 41.51Actuarial gain / (loss) 3.47 (32.52)Contributions by employer 721.71 574.78Benefits Paid (572.54) (315.83)

Closing fair value of plan asset 598.88 408.62

The principal assumptions used in determining gratuity obligations for the Groups’s plan are shown below:

31 March 31 March2016 2015

Interest Rate 7.21% 7.95%Discount Factor 7.21% 7.95%Estimated Rate of return on Plan Assets 8.00% 8.00%Attrition Rate 40.00% 40.00%Rate of escalation in Salary per annum 10.00% 12.00%Retirement Age 60 years 60 years

The major categories of plan asset as a percentage of the fair value of total plan asset are as follows:

31 March 31 March2016 2015

Investments with insurer 100% 100%

Notes:1. The estimate of future salary increases considered in actuarial valuation takes into account inflation,

seniority, promotion and other relevant factors such as supply & demand in the employment market.2. The estimated rate of return on plan assets is determined based on the market prices prevailing on

that date, applicable to the period over which the obligation is to be settled,3. The Group expects to contribute Rs. 1,400.77 lakhs to gratuity fund in 2016-17.

Amounts for the current year and previous four year period are as follows:

31 March 31 March 31 March 31 March 31 March2016 2015 2014 2013 2012

Defined benefit obligation 2,271.64 2,224.38 1,661.54 1,339.81 1,252.46Plan assets (598.88) (408.62) (140.68) (173.09) (294.31)(Surplus) / deficit 1,672.76 1,815.76 1,520.86 1,166.72 958.15Experience adjustment on

plan liabilities 84.27 364.24 132.14 (7.03) 52.13Experience adjustment on

plan assets 3.47 32.52 6.37 (0.06) (1.28)

30. Segment information

a) Primary business segment

The Group is engaged in a single business segment of sale of garment, and hence, no additional disclosuresare required, other than those already given in the consolidated financial statements.


99

31. Related party disclosuresA. Names of related parties and description of relationship:

Description of Relationship Names of related parties

a. Parties where control exists:

Immediate Holding Company Blackstone FP Capital Partners (Mauritius) V-BSubsidiary Limited

Ultimate holding Company Blackstone FP Capital Partners (Mauritius)V-B Limited

b. Key management personnel:Director and Chief Executive Officer Gautam Chakravarti (resigned effective May 25, 2015)

Vice Chairman and Managing Director Padala Ramababu (appointed effective on May 25, 2015)

Chief Financial Officer (CFO) Sumit Keshan (resigned effective on Nov 15, 2015)

Chief Financial Officer (CFO) Sathyamurthy A(appointed effective on Nov 16, 2015)

Company Secretary Ramya Kannan

B. The following are the volume of transactions with related parties during the year and outstanding balancesas at the year-end disclosed in aggregate by type of related party:

Nature of transactions 31 March 2016 31 March 2015

RemunerationKey Management PersonnelGautam Chakravarti 14.08 149.25Padala Ramababu 112.69 -Sumit Keshan 87.35 102.63Sathyamurthy A 22.49 -Ramya Kannan 8.20

244.81 251.88

Trade payables and other current liabilitiesRemuneration to Key Management PersonnelGautam Chakravarti - 42.91Padala Ramababu 21.53 -Sumit Keshan - 10.46Sathyamurthy A 3.24 -Ramya Kannan 0.58 -

25.35 53.37

b) Secondary business segment (by geographical area based on location of customers):The Group mainly operates in two geographical areas of the world, i.e., India and Rest of World, the detailsof which are as below:

Geographical Segment Revenues / Income Carrying amountof segment

assets

In India 22,559.44 68,051.20 (26,841.97) (61,488.66)

Outside India 91,732.90 5,577.69 (82,181.18) (4,417.29)

Total 114,292.34 73,628.89 (109,023.15) (65,905.95)

All fixed assets are located in India.Notes: Figures in brackets related to previous year.




33. Derivative instruments and unhedged foreign currency exposurea) Particulars of Derivative contracts: Forward contract outstanding as at balance sheet date

Sellcontracts

31 March 2016 31 March 2015


Purpose

Rs.(in lakhs)


Rs.(in lakhs)

USD 331.29 22,788.84 540.06 33,834.84Hedge of expected future salesEURO - - 37.29 2,521.72

34. Exchange difference

31 March 31 March2016 2015

Exchange difference loss / (gain)Pre-shipment packing credit 53.55 -Post-shipment credit (262.62) 105.68Forward contracts and options (689.32) (3,262.49)Foreign currency receivables (38.44) (83.60)Foreign currency payables 148.85 92.84

(787.98) (3,147.57)

b) As of the Balance Sheet date, the Group unhedged foreign currency exposure is as under:

Receivables / (Payables)

31 March 2016 31 March 2015

Amount in Amount in Amount in Amount inforeign Rs. lakhs foreign Rs. lakhs

currency currency

Bank balances – USD 2,943 1.95 2,435 1.53Trade receivables – USD* 6,795,231 4,507.62 4,982,429 3,120.49Trade receivables – EUR* 859 0.64 1,373,254 928.65Trade receivables – GBP* 979,301 931.81 108,645 100.58Loans and advances –USD 587,518 389.73 410,050 256.94Loans and advances – EUR 2,681 2.01 15,751 10.63Loans and advances – GBP 900 0.86 - -Short-term borrowings – USD - - (5,174,366) (3,242.26)Trade payables – USD (2,763,955) (1,833.75) (2,685,649) (1,682.83)Trade payables – EUR (18,092) (13.58) (21,404) (14.48)Trade payables – GBP (7,164) (6.82) (8,086) (7.49)Advances received from customers – USD - - (65,684) (44.42)

* net of export bills discounted


(All amounts in Indian Rupees in lakhs, except stated otherwise)32. Leasing Arrangements:

The Group’s leasing arrangements in respect of its office, factory and residential premises are in the nature ofoperating leases. These leasing arrangements, which are usually cancellable at the option of the lessee, are for atotal period ranging from eleven months to sixty six months and are renewable with mutual consent. All leasesinclude a clause to enable upward revision of the rental charge on a periodic basis as specified under the rentalagreement. The charge on account of lease rentals for the year is Rs. 3679.52 lakhs (2015: Rs. 2594.46 lakhs).

Future obligations of lease rentals for non cancellable period under respective lease agreements are as follows.

31 March 2016 31 March 2015Not later than one year 1,483.36 195.44Later than one year and not later than five years 3,760.82 -Later than five years - -

5,244.18 195.44

101

35. Employee stock option Plans (Equity settled)

In September 2010, the shareholders of the Group approved Stock Option Plan (ESOP 2010) in accordance with theguidelines issued by the Securities and Exchange Board of India (SEBI) for Employees Stock Options Plan. The plancovered all employees of the Group including employees of subsidiaries and directors and provided for the issue of1,718,800 shares of Rs. 5 each. The Group follows intrinsic method of accounting for stock compensation costpursuant to the Guidance Note on "Accounting for Employee Share - Based Payments" issued by the Institute ofChartered Accountants of India".

Nil (2015: 85,000) options have been granted during the year and 408,339 (2015: 1,136,668) are outstanding asat March 31, 2016. The vesting period ranges from 1 to 7 years. Weighted average of remaining contractual life is7.37 years (2015: 8.35 years). The weighted average exercise price of all the options is Rs. 42.34 (2015: Rs. 40.89).There is no compensation cost since the exercise price is equal to the intrinsic value as at the date of grant.

The weighted average fair value of options granted during the year was Rs. Nil (2015: Rs.55.86). The Black Scholesvaluation model has been used for computing the weighted average fair value considering the following inputs:

31 March 2016 31 March 2015

Dividend yield % * -

Expected volatility % * 45.50%

Risk free interest rate * 7.95%

Weighted average share price * 40.89

Exercise price * 80.20

Expected life of options granted in years * 10

* Not applicable since no ESOP’s were granted during the year.

The expected life of the stock is based on historical data and current expectations and is not necessarily indicative

of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility

over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the

actual outcome.

36. During the year ended March 31, 2016, the Group has recognised deferred tax asset to the extent that there is

virtual certainty supported by convincing evidence based on the future profitability and projections backed by

the confirmed customer orders on hand as at the year end. The Management believes that there is sufficient

assurance that future taxable income will be available against which the deferred tax assets can be realised.

37. The Group is in process of taking necessary steps to comply with the Transfer Pricing requirements relating to the

preparation & maintenance of the Transfer Pricing documentation with respect to the specified domestic

transactions entered into by the Group during financial year ended March 31, 2016. The Management is of the

opinion that the specified domestic transactions are at arm’s length and hence the aforesaid legislation will not

have any impact on the consolidated financial statements, particularly on the amount of tax expense and that of

provision for taxation.

38. The Company had filed petition with the Company Law Board for compounding of offence u/s. 297 of the

erstwhile Companies Act, 1956 for the transactions entered with CMS Info Systems Private Limited between July

2009 to October 2011 and as at date, the petition is pending with the Company Law Board.

For periods subsequent to October 2011, the Company had filed an application with Central Government,

Ministry of Corporate Affairs, seeking its approval u/s. 297(1) of the erstwhile Companies Act, 1956 for entering

into contract with CMS Info Systems Private Limited which is pending approval.









Name of the entity Net assets Share in profit or loss

As % ofconsolidated net

assets*

Amount in lakhsAs % of

consolidated profitor loss*

Amount in lakhs

31-Mar-16 31-Mar-15 31-Mar-16 31-Mar-15 31-Mar-16 31-Mar-15 31-Mar-16 31-Mar-15

ParentGokaldas Exports Limited 85.20% 105.50% 18,392.91 16,762.66 99.30% 99.05% 6,090.70 3,435.58

SubsidiariesIndian

All Colour Garments Private Limited 2.00% - 346.28 72.33 - - (2.59) (0.43)

Deejay Trading Private Limited 1.00% - 122.55 2.69 0.10% 0.45% 4.75 5.11

Glamourwear Apparels Private Limited 1.00% - 159.37 (33.60) 0.10% - 5.55 3.93

Madhin Trading Private Limited - (1.00%) 79.78 (189.58) 0.10% - 5.55 1.15

Magenta Trading Private Limited - (1.00%) 75.82 (194.89) - - 3.40 4.91

Rafter Trading Private Limited - - 75.26 (76.82) 0.10% 0.50% 4.39 5.48

Rajdin Apparels Private Limited 1.00% (1.00%) 209.23 (91.17) - - 6.93 3.16

Reflexion Trading Private Limited - - 28.54 (16.55) 0.10% - 5.59 3.05

Rishikesh Apparels Private Limited 1.00% - 104.38 15.28 0.10% - 5.74 2.13

Robot Systems Private Limited - - - 7.30 - - - (0.26)

Seven Hills Clothing Private Limited 1.30% (5.00%) 329.86 (715.47) 0.10% - 4.14 3.24

SNS Clothing Private Limited 7.50% 2.50% 1,581.39 332.20 - - 2.34 2.32

Vignesh Apparels Private Limited - - 82.22 9.27 - - (2.89) (0.65)

100.00% 100.00% 21,587.59 15,883.65 100.00% 100.00% 6,133.60 3,468.72

* Rounded off to zero for insignificant items.

40. Previous year comparatives

Previous year figures have been regrouped/re-arranged/reclassified, wherever necessary to conform to the current

year’s presentation.

39. Additional information, as required under Schedule III to the Act, of enterprises consolidated as subsidiary/

associates/ joint ventures

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